The Promise: Modern Homes in Familiar Localities
The primary appeal of buying into a redevelopment project is the chance to own a brand-new home in an established neighbourhood. These projects replace old, often dilapidated buildings with modern structures that feature contemporary amenities, improved
safety standards, and more efficient space planning. Unlike new projects in distant suburbs, redeveloped properties allow buyers to remain in a familiar area with existing infrastructure like schools, hospitals, and transport links. Buyers can get a larger apartment than what they might afford in a brand-new building in the same area, along with the potential for significant property value appreciation once the project is complete.
The Reality of Risks: Delays and Disputes
However, the journey from an old building to a new one is often fraught with challenges. Project delays are the most common and frustrating issue, with some projects stalling for years. These delays can stem from multiple factors, including disputes between the housing society members and the developer, the builder's financial instability, or hurdles in securing the long list of regulatory approvals. Sometimes, developers take on more projects than they can handle, leading to a diversion of funds and a complete halt in construction, leaving both original tenants and new buyers in a lurch. This can trap a homebuyer's capital and even lead to a situation of paying both rent and an EMI simultaneously.
The MahaRERA Safety Net
To protect homebuyers and bring transparency to the sector, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has introduced stringent rules. All redevelopment projects meant for sale must be registered with MahaRERA before marketing begins. This ensures a degree of accountability. Developers are required to deposit 70% of the funds collected from buyers into a separate escrow account, which can only be used for that specific project, preventing the diversion of money. MahaRERA also mandates that developers adhere to the promised possession timeline and provides a platform for quick dispute resolution if they fail to do so.
Your Essential Due Diligence Checklist
The phrase "building going for redevelopment" should be a signal for caution, not just excitement. Before committing, a thorough investigation is non-negotiable. First, scrutinise the developer's track record. Have they completed similar redevelopment projects on time? Check the project's RERA registration details on the official portal, including any complaints filed against the builder. Second, verify the legal documents. This includes the property's title, the Development Agreement between the society and the builder, and all statutory approvals like the Commencement Certificate (CC). Ensure at least 51% of the original society members have given clear, written consent for the redevelopment. Finally, assess the project's financial viability and understand the payment schedule, making sure it is linked to construction milestones.
