New redevelopment rules for societies

Monday, 19 January 2009 - 2:24am IST | Place: Mumbai | Agency: DNA
Redevelopment of housing societies is usually fraught with acrimony and complaints of high-handedness and corruption against the managing committee.

Redevelopment of housing societies is usually fraught with acrimony and complaints of high-handedness and corruption against the managing committee.

Hence, with a view to ensure transparency in societies seeking to undertake redevelopment projects, the state co-operative department has, for the first time, issued guidelines for societies to follow under section 79 (A) of the Maharashtra Co-operatives act, 1960.

The guidelines were issued last week after a committee comprising the co-operatives commissioner and Cidco chairman was formed to study a slew of complaints by members of housing societies undertaking redevelopment.

According to an important feature in the guidelines, a redevelopment scheme can be
approved by the general body only if three-fourths of the society members are present at the meeting.

Also, the special general body has to approve the bid of the successful bidder in a meeting attended by the registrar. The entire proceedings have to be video-recorded.

Once the agreement is accepted in terms of area and corpus fund, it cannot be revised.
On the other side, rules have been drawn up to make the developer accountable. The successful bidder has to give a bank guarantee equivalent to 20% of the total project cost to show his financial strength, and proof that he will not abandon the project midway.

The developer has to further complete the redevelopment project in two years, or a maximum of three years.

The development agreement, too, must be signed on carpet-area basis. Most importantly, if, for some reason, the successful developer is unable to complete the project, he cannot sell his agreement to another developer.

Rajesh Mehta of Raha Realtors Ltd, who guides housing societies in redevelopment issues, said these guidelines will bring transparency and give a boost to development projects. “The most important guideline is that the development agreement signed with a particular builder cannot be transferred to someone else. Such transfers create a lot of confusion and raise allegations of corruption,” he said.


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