Society Redevelopment in India — A Step-by-Step Guide for Committees

What is redevelopment

Redevelopment is when an old housing society (typically 30-50 years old) demolishes its existing building(s) and rebuilds — usually with a developer who provides the rebuild for free in exchange for additional FSI / TDR they can sell as new flats.

For members, redevelopment offers:

• Larger / modern flats (typically 25-40% extra carpet area)
• Modern amenities (lifts, parking, security, gym, pool)
• New 5-year structural warranty
• Often a corpus payment for transit accommodation rent

For developers, the upside is the additional saleable area.

For the society, this is a 3-5 year journey that needs careful management.

The 12-step process (3-5 years total)

### Year 1: Decision

Step 1: Feasibility study (Month 1-3)

• Engage a consultant (architect / project management firm) for ₹50,000-₹2,00,000
• Assesses building condition, applicable FSI, market rates, expected developer offers
• Output: Feasibility report shared with all members

Step 2: Special general body meeting (Month 4)

• 14-day notice with feasibility report attached
• Vote on "in principle" approval to explore redevelopment
• Requires 75% member approval (special resolution)

Step 3: Form redevelopment committee (Month 5)

• Sub-committee of 5-7 elected members
• Reports to managing committee
• Mandate: handle developer selection, negotiations, document trail

Step 4: Issue tender to developers (Month 6-9)

• Tender published in newspapers + online
• Specs include: existing area, expected new area per member, corpus expectation, transit rent expectation, completion timeline
• Developers submit sealed bids
• Typically 5-15 bids received

### Year 2: Developer selection + agreements

Step 5: Bid evaluation (Month 10-11)

• Compare bids on: area offered, corpus, transit rent, completion timeline, past project track record
• Shortlist 3-5
• Site visits to developer's past projects
• Reference checks with their past society customers

Step 6: Special general body meeting for developer selection (Month 12)

• Present top 3 bids
• Members vote on preferred developer (75% approval needed)

Step 7: Letter of intent (LoI) to developer (Month 13)

• Conditional commitment
• Developer pays 1-3% as earnest money

Step 8: Development agreement (DA) drafting (Month 14-18)

• Engaged via society lawyer (₹50,000-₹2,00,000)
• DA covers: areas, timelines, corpus, transit rent, defect liability, dispute resolution, RERA compliance
• Member-by-member agreement signed for individual flats

### Year 3-4: Construction

Step 9: Vacate building + transit (Month 18-22)

• Members move to transit accommodation (paid by developer)
• Building handed to developer
• Demolition + construction begins

Step 10: Construction monitoring (Month 22-44)

• Society's project management consultant monitors quality, timeline
• Monthly progress reports to committee
• Linked release of payments to developer (society holds the bank guarantee)

### Year 4-5: Handover + possession

Step 11: Possession + OC (Month 44-50)

• Building completion certificate
• Occupancy Certificate (OC) from municipal corporation
• Members move back; new flats handed over with documentation

Step 12: Society reformation (Month 50-54)

• New bye-laws drafted (sometimes)
• Maintenance restructure (new amenities = new maintenance heads)
• New chargehead structure for the new building

Critical document trail

Every redevelopment project needs these in HiSociety's document library:

1. Feasibility study report
2. SGM minutes (in-principle approval)
3. Tender document
4. All developer bids received (sealed copies)
5. Bid evaluation matrix
6. SGM minutes (developer selection)
7. Letter of intent
8. Development Agreement (society + developer)
9. Individual member agreements
10. RERA registration certificate
11. Bank guarantees from developer
12. Approved building plans
13. Construction milestone certificates
14. Quality audit reports
15. OC from municipal corporation
16. Sale deed / transfer deed for new flats

Common mistakes that destroy projects

1. Selecting cheapest developer — track record matters more than ₹/sqft offered
2. Weak DA — boilerplate template instead of project-specific terms
3. No quality monitoring — developer cuts corners during construction
4. Verbal modifications — developer says "we'll add a club room" but it's not in writing
5. No bank guarantees — developer disappears with member money
6. Missing RERA compliance — illegal post-2017
7. Skipping AGM resolutions — challengeable in court by 1-2 dissenting members
8. No project management consultant — committee can't monitor 50,000 sqft construction without expertise

Member dissent

Almost no redevelopment project has 100% member agreement. Maharashtra MCS Act allows redevelopment with 75% approval; dissenting 25% can be:

• Bought out at fair market value
• Forced via Cooperative Court order (slow but possible)

Engage a lawyer early to handle dissent properly.

Tax implications

Members typically don't pay capital gains on the redeveloped flat (Section 54F of Income Tax Act applies). But:

• Corpus received is generally taxable (consult CA)
• Transit rent received is taxable
• Stamp duty on new flat documents (paid by developer per DA)

How HiSociety supports redevelopment

• Project tracker — milestones, deadlines, alerts
• Document library — all 16 documents above, version-controlled
• Member communication — bulk updates, polling on key decisions
• NFA workflows — committee approvals at each stage
• Vote tracking — for SGM resolutions; auditable history
• Cost tracker — consultant fees, lawyer fees, contingencies

Conclusion

Redevelopment is the biggest project a housing society will ever undertake. Done right, it transforms member lives + adds 30-40% value. Done wrong, it creates 5-10 years of disputes, court cases, and regret. Use HiSociety to enforce process discipline at every stage.

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