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Societies going for redevelopment must follow a set of rules

Saturday, June 02, 2018
By Ramesh S. Prabhu

Q. In redevelopment projects, is the society undertaking the project liable to buyers under RERA?
Yes. Under Real Estate (Regulation and Development) Act, 2016 (RERA), when the redevelopment is undertaken even by the developer appointed by the society, the Co-operative housing society is also considered as promoter for sharing the built up area in the project. When the society themselves undertakes the self-redevelopment, then also the society becomes the promoter. Thus, when the society undertakes self-redevelopment or when the society appoints the separate developer, in both the cases, the society becomes liable to the flat purchasers under RERA.

Q. As per MahaRERA, is it mandatory for the builders to execute and register 'Sale Deed' as well, subsequent to agreement of sale?
As per section 13 of RERA, it is compulsory for every promoter to execute the agreement for sale before receiving more than 10% of the cost of the flat from the purchasers. In other words, immediately on receiving more than 10% of the amount from the customers, the promoter needs to register the agreement for sale. As per section 17 of RERA, every promoter needs to execute the sale deed of the flat in favour of the purchaser at the time of handing over the possession with Occupation certificate and the common areas like land, building, parking, gardens, compound, etc need to be conveyed to the association of allottees (Co-operative housing society). So far, the practice has been to register the agreement for sale, then register the co-operative housing society and then give the conveyance of land and building in favour of the society. Earlier, as per Maharashtra Ownership Flats Act, 1963 (MOFA) there was no need to execute the individual sale deed of the flat with individual purchasers after receiving 100% amount and handing over the possession of the flat, but under RERA, we need to execute and register the individual sale deed of the flat at the time of handing over the possession of the flat.

Q. In a joint venture development in case of complaints of flat buyers, is the land owner also a party to RERA complaints?
Yes. The land owner is also considered as the promoter along with the developer. Both will be made party in the RERA complaint.

Q. Can MHADA societies and other colonies go for redevelopment without tendering, without carrying out proper election, without appointing project management consultant, without carrying out structural audit, without carrying out the conveyance in the name of the society?
For any society to go for redevelopment, whether it is Mhada or private, the society has to comply with the directions for redevelopment issued by Govt of Maharashtra on 3.1.2009 under section 79A of the Maharashtra Co-operative Societies Act, 1960. The first requirement as per the direction is that the Committee should be duly elected and constituted. Therefore, without proper election, the redevelopment is not advisable and if any societies do so, the aggrieved members need to complain to the registrar. Tending is another important condition in this direction.

It is the duty of the society to appoint a project management consultant, who is required to verify all the compliances of the act including conveyance. In case, conveyance is not available, the same should be one of the conditions in the tender and only after the developer obtains the conveyance in favour of the society, redevelopment agreement has to be executed.  

Carrying out the structural audit is not compulsory for redevelopment but as the structure becomes more than 30 years old, as per the provisions made in the Municipal Corporation of Greater Mumbai act, every society must  carry out the structural audit once in three years, submit the report to BMC and comply with the recommendation done by the structural auditor, then submit the stability certificate by the same engineer. Therefore, it is recommended as a good practice to carry out the structural audit, and if the repairs are not major and society members are ready to contribute, the redevelopment can be postponed. The redevelopment is not a substitute for repairs. The repairs need to be carried out irrespective of whether the society is going for redevelopment or not.

Redevelopment decision has to be taken by the special general body meeting called at least 14 days in advance on the application received by at least 25% members of the society. Such redevelopment meeting should have a quorum of 75% members present and the decision has to be passed by majority of 75% members present in such meeting. In the meeting, the builder selected, the representative from registrar are required to be present. Get the video shooting of such meeting and obtain the confirmation from the registrar office about passing the resolution to appoint the builder after complying with all the requirement of 3.1.2009.

(Ramesh S. Prabhu is Chairman,  Maharashtra Societies Welfare Association)

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