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Self-Redevelopment Procedure

Process for Self-Redevelopment

Self-Redevelopment is a type of redevelopment where the entire process and all decisions are controlled by the members of the society instead of giving it to a Builder.

Prerequisites for starting Self Redevelopment Process in Mumbai

Following conditions should be met for a society to start the self redevelopment process:

  • The Housing Society should be the owner of the land, i.e. it should have the Conveyance Deed in its name or should have the land purchase agreement in its name.
  • The housing society should be a member of The Mumbai District Central Co-operative Bank Ltd (MDCC Bank) to avail self redevelopment loan under the Self Redevelopment Scheme, 2018. If the society is not a member of this bank, they can become a member by purchasing shares of the bank
  • The housing society has to be registered under the Maharashtra Cooperative Societies Act, 1960 as a Cooperative Housing Society.
  • Before applying for a loan for Self Redevelopment of the society with MDCC Bank, all pending Government dues have to be cleared off. Also, as on the date of application, Society Maintenance from all members needs to be paid with no arrears.

Starting the procedure for Self Redevelopment

Once a housing society has checked that it fulfils the requirements to start the procedure for self redevelopment of their housing society, they can start with the self redevelopment process:
  • To get the consent of all the society members on taking the Self-Redevelopment approach for redevelopment of their premises. A resolution has to be passed by calling a Special General Body Meeting.
  • To procure copies of all the required documents in place, which include:
    • Land purchase agreement or conveyance deed – Land ownership proof
    • Copies of original plan of the building, 7/12 extract and property card
    • Audited financial statements for last 3 financial years
    • Copy of updated byelaws and registration certificate of the society
    • List of committee members
    • Details of all society members including their unit sizes as per the actual plans.
  • The society then needs to appoint a Project Management Consultant to make a self-redevelopment project report (feasibility report) which provides important details like development potential as per the latest norms, overall budget and cost break-up for the project and the possible benefits to the society members.
After taking the decisions based on the Feasibility Study report, the society then moves ahead to appoint Architects, Legal Advisors, Chartered Accountants, Contractors who then guide the society at various stages of the self redevelopment process.
Along with the documents mentioned above, the society also needs to have in hand copies of agreements entered into with the Architects, Chartered Accountants, Legal Advisors etc.
Once all plans have been laid out and all documents are in place, the next step is to approach a bank for funding for the self redevelopment project.

Process for Self-Redevelopment

The MDCC Bank is the only cooperative bank in Mumbai authorized to provide loans for self redevelopment projects in Mumbai.
The bank provides up to 95% of the project finance cost. The loan is provided at 12.5% rate of interest. Generally, the Society’ contribution of 5% can be generated from the society members who would like to get an extra flat or buy extra space in the redeveloped building.
For projects up to Rs. 50cr, the total loan repayment period is 7 years, out of which 2 years is Moratorium period during which the society doesn’t need to repay anything to the bank. For projects more than 50 cr, the total loan repayment period and moratorium period is 10 years and 3 years respectively.

The project cost considered by the MDCCB includes TDR, fungible premium, rents for alternative accommodation, shifting, re-shifting, brokerage, professional fees, construction cost and any planned additional amenities like solar panels set up, play area, garden etc.
It is, however, important to note that the bank will provide its part of finance only after the society members have collected their part. In cases where the society members find it difficult to generate the 5% amount, experienced Project Management Consultant like Province PMC LLP. support in getting loans from NBFCs and private Investors.
To get finance from MDCC Bank, the society’s plots like the garden, parking area and saleable flats have to be mortgaged with the bank. But flats owned by the individual members and their rights are not mortgaged.
Province PMC LLP. provides end-to-end support for self redevelopment process, starting from arranging the initial finance, managing the design execution process through empanelled professionals, getting required approvals, managing the MDCCB loan sanction and disbursement process, managing the cashflow and the legal documentation while monitoring overall work to ensuring completion of the self redevelopment project in time. Province PMC LLP. also has the expertise and network to manage the sale of flats to support the society pay off the bank loan.

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  • +91 9920707485 / +91 9022339174 / +91 8369943352
  • Province PMC LLP 8, Ground floor, Suraj Building, Jagannath Bhatankar Marg, Elphinstone Road, Prabhadevi, Mumbai - 400013
  • info@selfredevelopers.com