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Appointment of Redevelopment Project Management Consultants (PMC) – Times of India

Wednesday, May 11th, 2011

An Article by Times of India

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The appointment of a project management consultant lays down the foundation of the entire redevelopment process.

As a co-operative housing or premises society initiates the process of redevelopment of its property,the first legal requirement it needs to fulfill in terms of the relevant circular of the department of co-operation is the appointment of a project management consultant (PMC).

The appointment of a PMC lays down the foundation of the entire redevelopment as successful completion of redevelopment largely depends upon the ability,integrity,uprightness and transparent and reasoned approach of the PMC.

The PMC should be knowledgeable on all legal and construction aspects of the redevelopment and should be aware of the redevelopment business so that he applies his knowledge and imagination to various stages of redevelopment in a manner that the society gets the best terms without compromising with safety aspects.

Although the nature and quantum of redevelopment services to be provided by a PMC would differ from case to case,a generalised model list is presented below as prepared on the basis of experience of PGV Project Management Consultants.

A society may select all or any of the services depending upon facts of its case and after interaction with the PMC.

Preparation of the feasibility report in respect of the subject property.Taking steps for conveyance in favour of society.Invite and receive offers from interested developers and present the same before the managing committee with recommendation about selection.

The recommendation report to be speaking and reasoned one.Draft of tender document or offer form in consultation with the society.Such draft should also be given to interested members of the society who may like to invite the developers in their respective contacts.A newspaper advertisement,if considered necessary,should be drafted in consultation with the managing committee.The PMC to analyse the tenders analysed and to apprise the managing committee about such analysis.Interested developers may seek clarifications from PMC.To each intending developer submitting the tender or offer form,the PMC should issue an acknowledgement receipt.The best of financial terms including corpus fund,larger area flats for each member,hardship compensation,rental compensation at prevailing market rate with due increment in case of rental market going up,best of amenities,strict legal terms in documentation,flexibility on the part of the developer to meet peculiar needs of the society and its members should be some of the prominent criteria for selection of developer.

The managing committee should tentatively select the developer on consideration of the recommendation by the PMC and the general body meeting should take a final decision on selection of the developer.Offers should be submitted by all the developers in a standard tender or offer format to allow comparision.The PMC should draft the Letter of Intent/Appointment on consideration of legal implications thereof.The PMC should co-ordinate with the office of registrar of co-operative societies in respect of the redevelopment process and should draft correspondence,papers and documents to be submitted to the office of the registrar in connection with redevelopment process.

Drafting of redevelopment documents as per society instructions and in consideration of applicable laws including MOFA,1963,MCS Act,1960,Transfer of Property Act,1882 and other property laws,laws and regulations concerning developments and constructions,bye laws of the society.Drafting documents on consideration of income tax,VAT,service tax laws.Drafting/amending bank guarantee.Drafting power of attorney.Drafting individual agreement for each member.Vetting TDR documentation from legal and taxes point of view.

Provision of services of the architect,engineer,chartered accountant,advocate in the matters connected with the process of redevelopment.As may be needed,attending meetings of members to explain and/or to interact with members.Filing of income tax returns of the society for the years during which redevelopment project continues.Manner of disclosure of benefits of redevelopment in individual income tax returns of the members in the relevant years,at the request of the member.Drafting correspondence on behalf of the society with architect,municipal authorities and others in relation to redevelopment project.Drafting various circulars and letters and resolutions for the society in relation to matters connected with redevelopment project.Drafting documents should be in an absolutely transparent manner.PMC services should primarily be in the nature of consultation and suggestions.Drafting of documents should also done after thorough discussion of the issues at stake
and after considering views of the society and after explaining PMC’s views.Ultimate decisions should be left upon the society.The PMC should help the society in the decision- making process but  should not insist that the decisions be taken only in
the manner it wants.
Redevelopment is a subject wherein lot of misconceptions lie;wherein a lot of public concern lies.Drafting of iron-clad documents is the single most important aspect in any redevelopment and the PMC should be able to assure that as far as redevelopment documentation is concerned,any member can compare the same with that of any other society and the member will himself be able to satisfy that documentation is the safest and takes care of every interest of the individual member as well as the interests of the society apart from taking care of the safety of committee members.
Drafting of the tender form or offer form should be such that only developers with merits and commitment would come forward as the drafting would clearly convey the message that the draftsman knows construction laws,property laws,stamp duty,registration laws,revenue laws,regulatory provisions and more importantly the draftsman knows the possible wrongs in the redevelopment projects and the necessary plugs to prevent such possible wrongs.Before accepting an assignment,the PMC should understand the society’s expectations and should explain the exact role that the PMC would perform in a particular project.PMC appointment should be under proper documentation.
Nothing speaks better than actual work.








In 2007 our society decided in favour of redevelopment.The managing committee consulted an architect and evaluated various aspects.At the AGM in 2008,a decision was taken in favour of self-redevelopment.However,some members favoured the builder option and called for a special General Body meeting,which constituted a redevelopment committee to assess the builder option.This committee started communicating directly with the members stating that being constituted by the General Body it is answerable only to members.Please clarify what is the role of the managing committee in the functioning of any such committee constituted by the General Body for a specific purpose.D.S.Katoch

Whenever a redevelopment committee or sub-committee is appointed,the Managing Committee (MC) has to prepare a set of rules and regulations for the functioning of such committees.The rules and regulations of the sub-committee normally should consist of the following points at least: – How the committee will be constituted by general body or by conducting the election.- How many members will be accommodated,whether wing-wise or floor wise representation will be done.- How many members of the committee will be part of the Redevelopment committee or all the MC members will be part of Redevelopment committee.- What are the rights,privileges,dues and the responsibility of such Redevelopment Committee.Whether they are required to sign a bond similar to M-20 bond which normally the committee members have to sign.- Whom such redevelopment committee will report to.How many times the committee will function.- Whether the redevelopment committee gets dissolved on the dissolution or on the expiry of the term of the managing committee or to continue till the redevelopment is completed.- Other issues pertaining to the respective societies.Once the draft rules and regulations of the Redevelopment Committee is prepared,the same should be sent to all the members including the registrar of cooperative societies.Get the same approved in the specially called general body meeting and then constitute the committee as per the rules.From your questions,it is clear that you have not formed such rules and now there is rift between two committees formed.Legally and ideally the Redevelopment committee should report to the MC and the same should be discussed in the General Body meeting.Redevelopment committee directly dealing with members or bringing the matter directly in the General body is not desirable at all and is not legally correct.For all legal purposes,it is the elected Managing Committee who is held responsible and accountable and not the redevelopment committee.Therefore,you will notice that there is no mention about the constitution of the Redevelopment committee in the Government Order dated 3.1.2009 issued for the purpose of redevelopment process to be adopted by the Housing Societies.