Mumbai, India’s financial capital, is home to thousands of aging co-operative housing societies, many of which are structurally unsafe and lack modern amenities. Redevelopment offers a practical solution: it revitalizes these buildings, enhances property value, and provides residents with upgraded homes and better infrastructure—all without incurring direct costs for members.

However, the redevelopment process is not without challenges. At Maparc Associates, we’ve supported numerous societies through this transformation and are proud to offer this in-depth guide to help you navigate the journey confidently.

What Is Redevelopment of a Co-operative Housing Society?

Redevelopment involves demolishing an old building and constructing a new one in its place. In Mumbai, where land is scarce and buildings often exceed 30 years of age, redevelopment helps address:

  • Structural safety concerns
  • Inadequate living space and outdated facilities
  • Need for better amenities, lifts, parking, fire safety, etc.
  • Rising property taxes and maintenance burden on residents

The process is either carried out by appointing a private developer or through self-redevelopment, where the society manages the process independently.

Why Redevelop?

  • Structural Safety: Old buildings (30+ years) often suffer from corrosion, weak foundations, and non-compliance with earthquake norms.
  • Higher FSI (Floor Space Index): DCPR 2034 allows additional construction rights, increasing the built-up area.
  • Better Amenities: Modern lifts, parking, rainwater harvesting, and fire safety systems.
  • Increased Property Value: Post-redevelopment, flats can appreciate by 50-100%.

Legal Framework Governing Redevelopment

A. Maharashtra Cooperative Societies Act, 1960

Consent Requirement:

  1. 70% consent for buildings over 30 years old.
  2. 75% consent for buildings declared “dilapidated” by BMC.

Role of Managing Committee:

Must pass a resolution in the General Body Meeting (GBM) before proceeding.

B. Development Control & Promotion Regulations (DCPR) 2034

FSI & TDR Rules:

  1. Base FSI: 1.00 to 3.00 (depending on location).
  2. TDR (Transfer of Development Rights): Can be used for extra construction.

Cluster Redevelopment:

  1. Societies in MHADA layouts can avail extra FSI under cluster schemes.

C. MOFA & RERA Compliance

  • Maharashtra Ownership Flats Act (MOFA): Ensures builder obligations (possession timeline, quality).
  • RERA Registration: Mandatory for projects over 500 sqm or 8 flats.

D. Municipal Corporation of Greater Mumbai (MCGM) Norms

  • IOD (Intimation of Disapproval), CC (Commencement Certificate), OC (Occupancy Certificate) required.
  • Fire NOC & Environmental Clearances needed for high-rises.

Step-by-Step Redevelopment Process

Phase 1: Society Preparation

  1. Conduct Structural Audit (by BMC-empanelled engineer).
  2. Hold GBM & Pass Resolution (70-75% consent needed).
  3. Appoint Consultants (Architect, Lawyer, Project Management Consultant).

Phase 2: Builder Selection & Agreement

  1. Float Tenders (Invite reputed developers).
  2. Evaluate Proposals (Compare FSI utilization, corpus fund, transit rent).
  3. Sign Development Agreement (Must include):
  • Minimum 1X carpet area for members.
  • Transit rent (as per Ready Reckoner rates).
  • Corpus fund (5-10% of project cost).
  • Penalty clause for delays (1.5X transit rent).

Phase 3: Approvals & Clearances

  1. Submit Plans to BMC/MHADA (IOD, CC).
  2. Obtain NOCs (Fire, Environment, Airport Authority if in funnel zone).
  3. Commence Demolition after CC approval.

Phase 4: Construction & Monitoring

  1. Relocate Members (Ensure smooth transit arrangements).
  2. Regular Site Inspections (Quality checks, RERA compliance).
  3. Obtain OC before possession.

Phase 5: Post-Redevelopment Formalities

  1. Conveyance Deed (Transfer land rights to society).
  2. Form New Committee for maintenance.
  3. Register Individual Flats under new agreement.

Key Challenges & Solutions

Challenge Solution
Disputes Among Members Mediation, voting, legal intervention if needed.
Builder Financial Issues Escrow account, bank guarantees, RERA safeguards.
Approval Delays Hire expert consultants for faster processing.
Transit Rent Disputes Link rent to Ready Reckoner rates with annual escalation.

Financial Aspects of Redevelopment

A. Funding Sources

  • Builder’s Investment (Most common model).
  • Bank Loans (If society opts for self-redevelopment).
  • Government Schemes (MHADA repair grants for cessed buildings).

B. Cost Distribution

  • Free Sale Component (20-30%): Builder sells extra flats to recover costs.
  • Corpus Fund (5-10%): For society’s future maintenance.
  • Transit Rent: Paid monthly till possession.

Role of Maparc Associates in Smooth Redevelopment

We provide:

  1. Feasibility Study & Legal Guidance
  2. Transparent Builder Selection Process
  3. Liaison with BMC, MHADA, RERA
  4. Project Monitoring & Dispute Resolution
Conclusion

Redevelopment is a golden opportunity for societies to upgrade their living standards and asset value. However, it requires meticulous planning, legal compliance, and expert guidance.