Redevelopment is the most practical, economical and long-term solution where old structures are proving uneconomical or obsolete or dilapidated. It involves demolishing old building and reconstructing it by appointing a good builder who can construct and handover new flats to the property owners free of cost with additional benefits and make profit by utilizing balance plot potential by constructing additional flats and shops, as per approval from Municipal Corporation of Greater Mumbai (MCGM), for redevelopment in Mumbai region.

There could be several reasons owing to which land owners may start considering the possibility of redevelopment of their property. One of the primary reasons being, “Old isn’t always gold!”, especially when it loses value with time. Tenements like buildings, homes and apartments being unnatural structures deteriorate and degrade with time. Buildings that came about decades ago show signs of strain with cement and concrete falling, exposing the girder rods and beams within, deteriorated plumbing leading to leakage, poor water-tank maintenance and so on. With time and low maintenance, this strain only grows.

If not addressed in time, there is every chance of the building imploding on itself. That said, the cost of maintenance of any structure grows with age. Other reasons like expanding families leading to requirement of additional space, implies purchase of new property. However, over increasing property rates make it difficult to buy new property in your neighborhood, resulting in compromising on the area one wishes to live, thus resulting in migration of family members to farther and inconvenient parts of the city or at the outskirts. Even in cases wherein the owned property is partially used by the landlord (and partially leased to tenants), or completely leased to tenants, the landlord is responsible for ensuring that the tenements that are rented are in habitable condition and free from damage. Ceiling leakage, pests, cracks, etc. that fall under structural repairs is always the landowner’s responsibility. In such a scenario, the property proves to be a dead investment.

The rightful and long-term solution to all such problems would be a complete demolition and rebuilding. And while one has to do that, it makes sense to plan it so that the final structure takes care of multiple needs. For the residents, redevelopment is a chance to get a new home, without compromising on their neighborhood, and other surrounding elements that they are familiar with. Redevelopment may also open up the possibility to have a bigger space in the same area. Along with this, residents also gain access to a new set of amenities such as a swimming  pool, gym, and updated security systems, which may have been unavailable in their previous complex. This procedures are applicable to the Landlord not occupying the property or Landlord occupying the property without any Tenants. 

While redevelopment sounds like a lucrative deal, residents should consider several factors to avoid disappointment. 

• MARKETABILITY OF PROPERTY 

Prior gearing up for property redevelopment, it is essential that the property has a clear And marketable title, which means that your property is free from claim from any other individual. 

When there are multiple stakeholders namely more than one landlord it is also necessary and expedient to get the shares of each individual crystallized. 

There are other additional issues that could jeopardize ownership, such as boundary disputes (encroachments) or easements. Whenever a property transaction occurs, like in case of property redevelopment, a complete property title search is performed to guarantee that the title is clear and marketable.  It is also necessary that ownership is documented with a chain of title deeds as well as the revenue records  needed to display the names of the landlords. Moreover, a builder has to get a clear title for undertaking redevelopment.

A lawyer would be the one to help understand the status of your Property Title and in case of multiple stakeholders the shares of each one of the stakeholder. A skilled property lawyer can provide Up To date information on property related documentation. A skilled property lawyer can also help you with the property paperwork documents such as providing clean property papers. Property lawyers will guarantee that all paperwork is in order through the entire process of redevelopment.

Property agreements are necessary and important in redevelopment projects. Since the landlords are betting their assets (the current structure would be demolished), it is important the builder compensates them well, abides by the law, and fulfills the demands stated in the agreement. Therefore, the agreement should be comprehensive to ensure the occupants don’t suffer financial losses in case the builder fails to complete the project. Hence an advocate would also be required to draft and execute the agreements carefully.

• Role of a PMC

Just as every parent daunts on the achievements of their child, Landlords also have great ideas regarding the marketability of their property. However, it is of utmost importance to get an impartial view regarding the positives and negatives of your property which ultimately will decide the realistic marketability of your property. Project Management Consultants (PMC) are the ones who will assist a landowner in this task. A consultant is a team of Architects, Civil Engineers and Legal Advisors. Once a landowner has appointed a lawyer, he / she can further connect you with PMC. Along with the lawyer. A PMC supports the landlord to understand realistically what is the salable component. The redevelopment project would generate,  in such an event the landlord can reach a disease which is purely of financial decision and the landlord shall rely on the lawyer to translate and transform what the landlord Wanted to achieve out of this business Deep in the form of documentation.  in the redevelopment project till its end  the Landlord can get maximum benefits from the builder. The  landlord in Consultation and advice from  the lawyer  Gets most important information as to the potential of the property namely the land and the building owned by the landlords as well as as per the prevalent rules regulations including development rules what could be the final Floor Space Index (FSI) which can be constructed on the field plot of Land. This helps the landlord during his commercial negotiations with the prospective builder where the lawyer ensures smooth documentation such as development agreement, power of attorney at sector. Furthermore, PMC will also assist the landlord in appointing a builder. Some of the duties of a PMC like Preparation of property feasibility report, etc. 

• DEVELOPMENT AGREEMENT 

·   An agreement document between the builder and the Landlord is a must. The document should explicitly specify the obligations and expectations of the builder and the owner to avoid issues. Moreover, it should also include a penalty clause in the case of a breach.

·    The agreement should mention the time of completion of the project, the size of the new houses, the mode and nature of monetary compensation: a one-time payment, reimbursement of rent, or a mix of both.

·   The developer also has to offer a monthly compensation in advance along with the brokerage and transportation charge that the tenant has to incur while securing an alternate accommodation

·    Once the agreement is accepted in terms of area and corpus fund Consideration, it cannot be revised.

• Alternative accommodation

 In every redevelopment project, the builder in charge is liable to provide alternative accommodation to every resident Landlord. It is something that many builders skimp on, which is why residents Landlord must push the builder to show the alternate accommodation facilities to them, before finalizing the deal.

• Find the right builder

The builder is the most crucial element in the redevelopment process, which is why it is extremely critical to find someone you can trust. Therefore:

·    Research about the builder well in advance.

·   Analyze their records, review the previous collaborators, evaluate the records of cost and time overruns, previous violation of regulations and legalities, among others.

·     Ensure that the process put forth by the builder should be transparent.

·     Choose only a reputed developer and abide by all the legal formalities.

·  The most recommended way to choose a builder is to go by the tendering system. The owner should prepare a comparative chart and, after checking the merit, reputation, technical capability, experience, financial status, quality of construction and successful completion of projects, it should select the builder

·  The developer is obligated to give a security deposit to the members of the society equaling the entire cost of redevelopment. Ensure that the point is mentioned and agreed upon and duly documented.

Redevelopment has a massive role to play in improving the quality of people’s lives and eventually the city’s standard of living, and that’s why, most definitely, it is a smart swap. Redevelopment must be a beneficial project for all parties involved.