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

Wednesday, May 11th, 2011

An Article by Times of India http://www.timesofindia.com

In case you society needs redevelopment consulting / PMC please write to us on contact@redevelopmentpmc.com or call us +91 98335 45366

A KEY ROLE

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.

QUICK BYTES

 

THE FIRST LEGAL REQUIREMENT A SOCIETY NEEDS TO FULFILL IS THE APPOINTMENT OF A PROJECT MANAGEMENT CONSULTANT

 

PMC SERVICES SHOULD PRIMARILY BE IN THE NATURE OF CONSULTATION AND SUGGESTIONS

COMMITTEE ISSUES

FOR ALL LEGAL PURPOSES,THE MANAGING COMMITTEE IS HELD RESPONSIBLE

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.

http://www.redevelopmentpmc.com

Redevelopment, know the rules , look before you leap

Monday, May 9th, 2011

Redevelop, but look before you leap
Source : DNA

Siddhesh Powar, a Matunga resident, is tense as he enters the most uncertain phase in realising his goal of getting his 24-year-old building redeveloped.
In three months, the structure will be razed and he will have to keep his fingers crossed until he enters a new home.

His apprehension is understandable, as scores of such ventures across the city — including the Golibar project by Shivalik Venture, the DN Nagar project, Subhash Nagar, MIAL-slum rehabilitation project, and others — are facing hurdles from agitated residents, greedy brokers and stubborn developers.

PC Churi, consultant and ex-chairman of Maharashtra Societies Welfare Association (MSWA), said such situations would not arise if people follow the rules clearly. Churi said, “Most times, there is no transparency in tendering, breach of Maharashtra co-operative societies (MCS) laws, non-preparation of feasibility report, disparities in the development agreement etc. Once the building members decide that they want to go for redevelopment, they should submit the suggestions to the secretary. They should then call for quotations from minimum five architects or project management consultants (PMCs). After forming the special general board meeting (SGBM), they should select the PMC. Also, for the SGBM, requisition should be signed by not less than one-fourth of members, and the meeting has to be held within a month giving 14 clear days’ notice.”

The PMC has to submit the feasibility report in two months and members should make their suggestions within eight days. Churi and advocates also warn that video-shooting of every SGBM is necessary and the project report should be approved by the majority. In case of no quorum, the meeting is dissolved and it can’t come up for one year. Also, the approval should be in writing from three-fourth of members. The written agreement with the developer should clearly state the agreed carpet area and the bank guarantee from the developers’ end.

If you looking for Redevelopment Rules , PMC , Consulting , Legal please feel to write to use contact@redevelopmentpmc.com or call on +91 98335 45366

 

 

REDEVELOPMENT RULES OF CESSED BUILDING THROUGH PRIVATE DEVELOPER -MHADA

Monday, May 9th, 2011

REDEVELOPMENT OF CESSED BUILDING THROUGH PRIVATE DEVELOPER

(If you are looking for Redevelopment Process / Rules / Consulting / Legal advice for your society please email us on contact@redevelopmentpmc.com  or call us on +91 98335 45366)

As the pace of reconstruction of cessed buildings by MBRRB was found to be not sufficient so as to cover the entire cessed buildings in the Island City of Mumbai, it was felt by the Govt. that the pace of redevelopment could be increased with the involvement of tenants/landlords/private developers.
With this in view, the State Govt. introduced the policy of giving FSI 2.00 for redevelopment of cessed buildings in the year 1984. In the year 1991, the Govt framed the Development Control Regulations for Mumbai. Under these Regulations, the Rule no. 33(7) was formed for redevelopment of cessed buildings in the Island City of Mumbai and the provisions of the policy of 1984 were incorporated in it.
However, there was no encouraging response to this scheme from the tenants/landlords. Hence, the Govt. formed a Committee under the Chairmanship of Shri Sukhtankar to overview the implementation of the scheme. On the submission of the Report of the Sukhtankar Committee, the Govt. in the year 1999 amended the Development Control Regulation 33(7). The brief highlights of the amended Development Control Regulation 33(7) are as follows:

    1. In case of redevelopment of ‘A’ category cessed buildings (constructed before 1940) undertaken by the landlord or Cooperative Housing societies of landlord or occupiers, the total FSI shall be 2.5 of the gross plot area, or the FSI required for rehabilitation of existing occupiers plus 50% incentive FSI, whichever is higher. Under the new policy the developer is assured of at least 50% FSI for free sale. Also the policy enables rehabilitation of all occupants on the same plot, reducing social dislocation.
    2. Self contained flats of minimum 225 sq.ft. and maximum 753 sq.ft. carpet area are given to the old residential tenants/occupants. Shopkeepers are given an area equivalent to their old area.
    3. In case of ‘B’ category cessed buildings permissible FSI shall be the FSI required for rehabilitation of existing occupiers plus 50% incentive FSI.
    4. As per the permissible FSI, stated above, will depend upon the number of occupiers and the actual area occupied by them, no new tenancy created after 13.06.1996 shall be taken into account, while computing the permissible FSI. Similarly, tenants in unauthorized constructions made in the cessed buildings shall not be taken into account while computing permissible FSI, i.e. the total no. of tenants/occupants should not increase after 13.06.1996. The responsibility for rehousing such tenants whose tenancy may have been created after 13.06.96 or who stay in unauthorized construction will lie solely with the NOC holder.
    5. Though some buildings may belong to ‘C’ category (may not belong to ‘A’ or B’ categories), they may be so dilapidated and dangerous that their reconstruction is most urgently necessary to this end, the Government has granted additional incentive FSI as per Point No.1 above for redevelopment of buildings of any category declared as dangerous, prior to monsoon of 1997.
    6. A large number of old properties can be better developed by clubbing them together instead of developing each property separately. This leads to lesser congestion and better infrastructure such as internal roads, open spaces, etc. To encourage the composite redevelopment of several cessed properties together, the Government has granted additional incentive FSI for composite redevelopment.

The additional incentives in FSI for joint redevelopment of A, B or C category cessed buildings on two or more plots are as follows:

No. of plots proposed for

composite redevelopment

FSI permissible
a) One plot. 2.5 or FSI required for rehabilitation of occupiers plus 50% incentive FSI whichever is higher.
b) 2 to 5 plots. 2.5 or FSI required for rehabilitation of occupiers plus 60% incentive FSI whichever is higher.
c) 6 or more plots. 2.5 or FSI required for rehabilitation of occupiers plus 70% incentive FSI whichever is higher.
  1. In some cases, it may not be possible to utilize the entire permissible FSI on the same plot, because of height restrictions, fire-safety regulations, etc. In such cases, the NOC holder is entitled to avail the benefit of “Transferable Development Rights” (TDR), to be used in the suburbs or extended suburbs in accordance with the relevant regulations of DCR 1991, for Greater Mumbai. This provision ensures that the scheme remains feasible even where the incentive FSI cannot be fully utilized on the same plot.
  2. In case of Heritage buildings in Grade III and precincts, no permission of the Municipal Commissioner or Heritage Conservation Committee is now necessary, if the height of the buildings does not exceed 24 meters (excluding stilt).
  3. All these modifications and incentives mentioned in Government gazette notification dated 25.01.1999 will not be applicable to the areas which are affected by the Coastal Regulation Zone (CRZ) notification issued by Ministry of Environment and Forest, Government of India vide notification dated 19th February 1991, and orders issued from time to time.
  4. The surplus Built-up area is to be surrendered to M.B.R & R. Board as per Schedule -III of MHADA Act 1976.

Note: As per Govt. G.R. dt. 2-3-2009, minimum carpet area admissible is 300 sq. ft. in lieu of 225 sq. ft

Redevelopment of Society

Sunday, May 8th, 2011

Collect the details and required documents from the society  define details and list down required documents for each categories</ins>

Make a feasibility report ( Use a Redevelopment Project Management Consultant)

LOI (letter of Interest) is given to society.

Make format of the same with various options Further details are asked like Legal etc.

Once Developer is satisfied an offer is given to the society & Negotiation take place.

Architectural presentations are given and sites visit arranged.
Further procedure is as follows:

Ø Society resolution deciding redevelopment of the Society and further accepting the developer or its subsidiary Company to be the Developer.
draft resolution if available

Ø The signing of the Development agreement, the Power Of Attorney and the letter of Consent by each of the member in favour of the Developer / subsidiary company.

Ø Plans will be submitted by the developer to the members and signatures obtained on them after members ascertaining their carpet areas. Both signatories’ developer and members to sign and freezing of plans.

Ø 1st installment of Corpus/Hardship Compensation (termed ‘hardship’ to avoid capital gain tax) to be released as per offer, normally on the execution of the registered documents.

Ø Passing of plans from MCGM, paying of relevant premiums and requisite fees to obtain IOD.

Ø 1st installment for alternate accommodation and notice to vacate, where required.

Ø Signing of tri partite ownership flat agreement between. Members/society/developers and payment of Stamp Duty/Registration for additional area.

Ø Handing over of members flats to the developer for demolishing, where required.

Ø 2nd installment of Corpus / hardship compensation to be released on members vacating and handing over the possession of the flats for further demolition.

Ø Demolition of the building where required. for all above points upto this point make efficient timelines without budgeting inefficiency</ins>

Ø Obtaining Commencement Certificate after the demolition is completed.

Ø Beginning of construction.

Ø Payment of 2nd installment for Alternate Accommodation(as per offer)

Ø Completion of construction and handing over the ownership flat to members with all the amenities.

Ø Balance compensation.

Ø Admitting new members to the society.

Ø Balance compensation to the society to bring them in par with the existing members.