Best approach for self-redevelopment of a real estate project: 7 things to know

Tired of disappointments with developers, housing societies are increasingly turning to self-redevelopment. This involves residents hiring a contractor and project management consultant, excluding builders. Selfredevelopment offers clear advantages: any surplus from selling additional inventory stays within the society and is distributed among members. “The major advantage is that society members reap the benefits of the property’s potential rather than the builder,” says Anuj Puri, Chairman of ANAROCK Group. By securing additional FSI directly, the society gains up to 25-30% more carpet area, compared to the typical 10-15% offered by builders. Moreover, the society controls every aspect of redevelopment. “Societies have more say in design, amenities and construction quality,” points out Swapnil Anil, Executive Director & Head, Advisory Services, Colliers India. They can also choose new members for the free-sale area.

Despite the benefits, self-redevelopment is challenging. “From getting approvals to securing no-objection certificates, society members must do it themselves and work cooperatively,” says Puri. The society needs to get the land conveyed in its name, a lengthy process. Achieving consensus on design, budget, and potential compromises can also be difficult, observes Samir Jasuja, CEO, PropEquity.

First, the housing society must secure member consent by convening a special meeting, with notices sent to all members and the local registrar’s office, which sends a representative. Although unanimous consent isn’t legally required, most banks now mandate 100% written consent for self-redevelopment loans.

After securing consent, the society can hire a project management consultant to oversee feasibility studies, contractor coordination, approvals, and project execution. Without a consultant, the society must independently handle the tender processes for hiring a builder, architect and lawyer. Even with a consultant, selfredevelopment is challenging. “Evaluate your society’s capacity to manage a complex project before choosing self-redevelopment,” advises Jasuja.

Establish a core committee with professionals to oversee the project, ensuring transparency and regular communication. Compliance with all legal and regulatory requirements, including obtaining necessary permits, is crucial, suggests Shubhi Jain, Principal Partner & Head of CRM, Square Yards. “Self-redevelopment is demanding, but with careful planning, professional guidance, and strong resident unity, it can be rewarding,” asserts Anil.

Best approach for self-redevelopment
1.Feasibility study
Conduct a thorough study to assess the project’s viability, including cost estimates, legal requirements and timelines.
2.Resident education & consensus
Educate residents on self-redevelopment benefits and challenges, ensuring a clear majority is on board.
3.Form a strong committee
Elect a committee with skilled members in project management, finance and legal matters.
4.Hire professionals
Engage qualified architects, engineers, project managers and legal advisers to guide the process.
5.Financial planning
Secure financing through loans, resident contributions, or a combination, with a transparent budget.
6.Transparent communication
Maintain open, consistent communication with residents throughout the process.
7.Regular meetings
Hold regular meetings to address concerns, share updates, and maintain resident engagement.