Who is the developer and what is their track record?
Before anything else, the developer's credibility is paramount. Don't be swayed by a flashy presentation. Ask for a list of their previously completed redevelopment projects. Visit these sites and, if possible, speak to the residents there. Were promises
met? Were handovers on time? A developer with specific experience in redevelopment is crucial, as these projects are far more complex than new constructions. Also, verify their financial stability. A builder without sufficient funds is a primary reason projects get stalled, leaving members in the lurch. Finally, ensure the developer and the project are registered with the Maharashtra Real Estate Regulatory Authority (MahaRERA). This is a mandatory safeguard.
What are the exact financial terms?
The financial offer is more than just the extra area you get. Scrutinise the details. First, clarify the new carpet area, not the super built-up area. Your rights entitle you to a flat with an area equal to or greater than your existing one. Second, understand the corpus fund. This is a lump-sum, tax-free amount paid by the developer to each member or the society, intended to cover increased maintenance costs in the new building. This amount should be clearly fixed in the agreement. Third, discuss the transit rent. The developer must pay for your alternate accommodation during construction. This rent should reflect current market rates in your locality and include a clause for escalation if the project is delayed.
What are the legal agreements and guarantees?
Legal documents are your strongest protection. The Development Agreement (DA) is the most critical document, outlining every detail of the project. Do not sign anything without having it vetted by an independent lawyer hired by the society. Ask about the bank guarantee. New rules mandate that developers must provide a bank guarantee, often around 20% of the project cost, which protects the society if the developer defaults. Furthermore, insist on individual agreements between each member and the developer, in addition to the main agreement with the society. This secures your personal entitlements. Finally, question the Power of Attorney (PoA). It should be specific and limited, only granting the developer power to get necessary permissions, not to create third-party rights on the entire property.
What is the project plan and timeline?
Ambiguous timelines are a major red flag. The agreement must specify a clear start date and a firm completion date. A typical redevelopment can take two to three years, but delays are common and can extend this significantly. Ask for a detailed project plan with milestones. What happens if these timelines are not met? The agreement must include a penalty clause, where the developer is liable to pay a penalty for each month of delay. Also, ask to see the proposed building plans and layout. Ensure the promised amenities like parking, gardens, or community halls are explicitly mentioned in the official plans submitted for approval, not just in a brochure.
How are transparency and communication handled?
Poor communication breeds mistrust and allows problems to fester. Before finalising a developer, ask how they plan to keep members updated on progress. Will there be regular meetings? Who is the single point of contact for queries? According to new rules, general body meetings for redevelopment must be video-recorded to ensure transparency. The society’s managing committee, along with a Project Management Consultant (PMC), should ensure all documents, from the feasibility report to the developer's tender, are accessible to every member. This transparency is crucial for the 51% member consent required to approve a developer.
