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

• 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.

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.