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Redevelopment of Housing Societies...the evil side of fairy-tale

In cases of redevelopment, it is said that till you do not leave the society, you are the KING. The day on which you handover your property to the builder for redevelopment and leave the society, the builder is the KING.

Mumbai has become the capital of corruption, especially in the construction business, perhaps, because of the highest property rates in India. Cheating property buyers, flouting the rules, getting the requisite papers and plans approved sometimes in advance, selling refuge and other free of FSI areas and construction and sale of illegal floors are common these days in the financial capital of India.

Redevelopment is the hot issue today as vacant and un-encroached land is now hardly available to carry out further construction. A number of Housing Societies have old and dilapidated buildings that need redevelopment. The cost of structural repairs by demolishing and reconstructing such buildings is often beyond the reach of any Housing Society and flat owners. This is the prime reason why many Housing Societies are willing to opt for redevelopment to acquire ultimate safety.

The Housing Societies having old buildings are having many weaknesses and vulnerabilities such as lack of services like security, cleaning, absence of common facilities like Society office, unavailability of proper playing area for children in the compound, persistent leakage problems, absence of elevators in high rise buildings, poor and underprivileged interior planning of rooms and low resale value on sale of flat due to the poor condition of the buildings. Therefore, redevelopment in Mumbai has huge potential for Builders and Property Developers as there are constraints on the availability of open land within the city limits owing to the growing demand for houses and an acute shortage of housing stock.

On the other hand, there are various advantages for the Housing Societies who opt for redevelopment of their existing properties in to new structures having lavish grand entrance lobby, latest amenities in rooms, exclusive Society office as per norms, enhanced view from flats, spacious common passages and staircases, availability of modern elevators, generous car parking space, health club and gym if agreed, landscape garden for recreation, high end security systems, stand by generators, efficient fire fighting system, underground water tanks with submersible pumps having sensors, provision for piped gas, cable TV, telecom, internet connection, concealed plumbing and electrical lines.

There are numerous instances where firstly, the members of the Managing Committee are hooked and enticed of unlawful gratifications in substantial amount by certain unscrupulous Developers and use these Managing Committee Members as agents to pursue and pass over the rosy dreams and benefits to innocent members of the Society and criminally ensure that the redevelopment project is bagged by the concerned Developer.

The corrupt members of the Managing Committees also resort to arm twisting, harassment and threatening method to the flat owners into submission as per the builder’s orders. Scared by such hounding tactics, most society members accept and offer their consent towards the redevelopment of their society without any protest and prefer to go along with whatever the members of the whole Managing Committee decides.

It is well known fact that the illegal gratifications and lavish spending by a large cartel of unscrupulous Builders entice the members of the Managing Committees of Cooperative Societies and provoke them to turn against their own members of the Society in the matter of obtaining consent and force implementation of redevelopment.

Numerous cases are on record of press where the dreams of innocent middle class families are crashed when the redevelopment assignments undertaken are neither accomplished in given time by Builders chosen by Housing Societies nor are the promised facilities made available or never provided. There are types of voracious Builders of III tire who have delayed the redevelopment projects due to paucity of inflow or diversion of funds from the assigned projects in order to acquire more and more projects beyond their financial means or are simply not capable to execute the projects due to lack of competency.

It has been often noticed that during the process of redevelopment, the terms of Development Agreements as agreed upon are twisted and unhealthy attempts with ulterior motives are made by the Builders to twist and grossly violate the rules of MRTP and DCR by unlawful planning and constructing additional / unauthorized areas that are beyond their entitlement (i.e. beyond the plot FSI and the TDR / FSI loaded) for their hidden financial gains. The buyers of such unlawful flats / properties land themselves in deals that lead to litigation at a later date as also it is not viable to pull the builder to court and wait for years to get fair justice.

Once the buyers sign on the dotted line and pay the cost, he is at the builder’s mercy. It is not expected of a common man to analyze the hidden risks in a redevelopment scenario. His knowledge is zero to know the judiciary system and its intricacies. The builders on the other hands have fleet of highly paid advocates and experts to advise and protect them.  

The Builder selected, should be of unshakable reputation for quality, efficiency, trust, meticulous planning, top quality amenities, superlative designs, timely completion, guaranteed possessions and handing over of property of the Society for rehabilitation of its members.

It is worth to mention here that in the name of redevelopment of old housing societies in Mumbai, the various authorities, in last few years have carpeted free ground to breed rampant corruption to benefit the private builders to sub serve their illegal and deceitful objectives to garner huge profit. This is most required of the Government to impede the members of Managing Committees to enjoy the sleep with the builders for few greens and thrust redevelopment idea on the innocent and gullible members.

Major laws required to be kept in mind include the Transfer of Property Act, 1882, Registration Act, 1908, Indian Contract Act, 1872, CRZ laws, State laws like Maharashtra Ownership Flats (Regulation of Promotion of Construction, Sale, Management and Transfer) Act, 1963, Maharashtra Co-operative Housing Societies Act, 1960, stamp duty laws, Development Control Rules, Environmental Law, Tree Cutting Laws, Municipal Laws, Slum Redevelopment Scheme etc. If there are serious legal irregularities in the process of redevelopment and when they are noticed halfway, they can jeopardise the redevelopment and the consequences can be severe as what the law does not permit cannot be done either by the Builder or by the Society.

Housing Societies should remember that going in for redevelopment without knowing the precise procedures and processes involved is like walking on the edge of a cliff blindfolded - they have no idea when a wrong step could send the Society tumbling downwards. Essential information is one concept where half knowledge is infinitely more dangerous than ignorance. Even if the Society takes the right step but without following the necessary guidelines, all efforts would be rendered null and void. Clearly, the need of the hour is that those standing on the threshold of redevelopment receive advice from Industry Leaders having both, the Experience and Expertise.

Last, but not the least, the successful execution of any redevelopment project primarily depends on the management by the members of the Managing Committees with transparent efforts to protect the corporate interest of the society and 100% co-operation of each and every member. This, in turn is again depends on the capacity of the members of the Managing Committees who are entrusted with the management of entire process of the redevelopment with their honesty and integrity.

We wish to educate Housing Societies and caution them to be vigilant from Irregularities and illegalities in Redevelopment by the Builders, Illegal gratifications showered by Builders on corrupt Members of Managing Committees, Rampant Corruption in BMC, Flagrant violation of Rules and Regulations by the Builders, how to beware of Cheat and Fraud Builders and their criminal and felonious acts.