Somewhere in Mumbai tonight, a housing society's managing committee is sitting in the secretary's living room, passing around a glossy proposal from a developer. The building is fifty years old, the terrace leaks, the lift is a rumour, and the offer promises bigger flats, a new lift, parking and a corpus. Someone asks what happens if the builder disappears. Someone else says that never happens with a reputable firm. The chai goes cold.
Redevelopment is one of the most consequential decisions a group of neighbours will ever make together. Done well, it gives families a safer, larger home at no cash cost. Done badly, it can leave them in rented flats for years longer than promised, chasing a developer who has run out of money. The difference is mostly in the questions asked before anyone signs.
Start with the process, not the proposal
In Maharashtra, cooperative housing societies undertaking redevelopment are expected to follow directions issued by the state under Section 79A of the Maharashtra Co-operative Societies Act. These directions set out how the decision is to be taken: the general body meetings required, the quorum and majority needed, the appointment of an architect or project management consultant, how tenders or offers are invited, and how the final developer is chosen and approved. They have been revised over the years, so read the current version rather than relying on what a neighbouring society did a decade ago.
The core principle is that redevelopment is a general body decision, not a committee decision. Every member should receive notice, the proposals should be tabled openly, and minutes should record who voted and how. A process that is rushed, conducted over WhatsApp, or presented as already agreed is a warning sign in itself, regardless of how attractive the numbers are.
It is also worth knowing that the developer should not be the one appointing your advisers. The society chooses its own consultant and its own lawyer.
The questions to ask
About your new home
How much carpet area is being offered, and on what base? Offers are often stated as a percentage over existing area. Ask what the existing area is taken to be. It should be the documented carpet area, verified against approved plans and society records, and the new area should be stated in carpet terms consistent with RERA, not in built-up or super built-up figures.
What exactly will be built? The specification schedule should list flooring, fittings, windows, lifts, parking, water storage and so on in enough detail to be enforceable. "Premium quality" is not a specification.
Where will each member's flat be? Allotment by floor and orientation causes more quarrels than any other clause. Agree the method, whether by lottery, by existing position or otherwise, before signing.
About money
What is the corpus, and when is it paid? A corpus is a one-time amount paid to each member, often intended to offset higher maintenance in the new building. Agree whether it is paid upfront, in instalments linked to milestones, or on possession, and how it is secured.
What rent or transit accommodation will be provided? Most developers pay monthly rent so members can live elsewhere during construction. Ask what the monthly figure is, whether it escalates each year, how many months are paid in advance, whether brokerage and shifting charges are covered, and, critically, what happens if the project overruns. Rent should continue until possession, not until the originally promised date.
Is there a bank guarantee? A bank guarantee protects the society if the developer fails to perform. Ask what it covers, for how much, from which bank, for how long, and under what conditions it can be invoked. A guarantee that expires before the building is complete is decorative.
Will there be an escrow arrangement? Where the developer sells additional flats in the new building, some societies insist that sale proceeds or rent obligations be routed through an escrow account, so that money meant for completing the project cannot be diverted. Ask whether this is on offer and how it will be monitored.
About time
What is the timeline, and what are the penalties? The agreement should specify dates for vacating, commencing work and handing over possession, and a clear penalty for delay beyond a grace period. Penalties should be large enough to matter to the developer and easy enough to enforce that the society can actually collect them.
What approvals are still pending? Much of the delay in Mumbai redevelopment comes from approvals: from the BMC or the relevant planning authority, from environmental and other agencies, and for additional floor space. Ask which approvals are in hand, which are expected, and who bears the risk if one is refused. Members should not vacate until the key permissions are in place.
Will the project be registered with MahaRERA? Where the developer sells new flats in the redeveloped building, the project must be registered with MahaRERA. Registration brings disclosure obligations and a public record of progress, which helps the society as well as the buyers.
About the developer
What is the developer's track record? Do not settle for a brochure. Visit completed redevelopment projects, preferably with residents who moved back in. Ask how long those projects took, whether rent was paid on time and whether promised specifications materialised. Check the developer's other registered projects on MahaRERA for delays and complaints.
Is the developer financially able to finish? A society is entitled to ask about the developer's net worth, existing borrowings and how the project will be funded. A developer building ten projects at once on thin capital is a different proposition from one building two.
Who is the society's own consultant? A project management consultant, working for the society rather than the developer, can scrutinise the feasibility report, compare offers on a like-for-like basis, and monitor construction. The fee is modest relative to what is at stake. Our society secretary put it well when he said that the consultant's job is to be the one person in the room who is not excited.
Fairness runs both ways
It is easy to cast the developer as the villain in these stories, and some have earned it. But redevelopment only works if the project is viable. A society that demands more carpet area, a larger corpus and higher rent than the land can support will either find no serious bidders or attract exactly the kind of developer who promises everything and delivers nothing. The feasibility report exists for a reason. Read it, have your consultant challenge it, and then accept that the numbers have to work for both sides.
Members, too, owe one another fairness. Elderly residents may have different priorities from younger ones, and a family on the ground floor may lose something a family on the top floor gains. The general body process is designed to surface those differences, not to steamroll them.
Sign slowly
The most useful advice I have heard on redevelopment is also the least exciting: slow down. A building that has stood for fifty years can stand for another six months while the society gets its answers in writing. Developers who are serious will wait. The ones who insist on signing this week are telling you how they will behave for the next five years.
Get the process right, ask every question above, and have the answers drafted into a development agreement reviewed by your own lawyer. Then, and only then, pass the pen around the living room.
