Maharashtra sets stricter redevelopment norms, higher safeguards for housing societies

MUMBAI: With the government of Maharashtra mandating greater transparency and setting clearer timelines for key stages of the process, cooperative housing societies in Mumbai and across the state undertaking redevelopment will now face tighter requirements on developer selection, tendering, member approvals and documentation.

The state government has issued the revised order, replacing the July 4, 2019 resolution and subsequent circulars issued under it. As per the revised framework, the project completion period should not exceed two years from the date of the plinth certificate, or three years in exceptional circumstances.

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It requires at least three bids for developer selection, approval from at least 51% of the society’s total membership, video recording of the developer-selection meeting and execution of the redevelopment agreement within three months of the developer being selected.

“The revised redevelopment framework is a significant step towards bringing greater transparency, accountability and predictability to one of Mumbai’s most important urban transformation processes. The emphasis on professional project assessment, competitive developer selection, transparent documentation and clearly defined rehabilitation arrangements will help build greater confidence among society members,” said Niranjan Hiranandani, Chairman, NAREDCO.

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According to him, the two-year completion timeline from the prescribed plinth or foundation stage reinforces execution discipline, while timely approvals and close coordination among societies, developers and authorities remain critical to avoiding project delays.

The redevelopment segment in Mumbai, the country’s largest and costliest property market, has emerged as a major driver of housing activity, with more than 1,000 projects since 2020 and its share of residential sales more than doubling over the past decade.

The revised framework applies to redevelopment undertaken through a developer, self-redevelopment, group redevelopment through federations and redevelopment by a group of societies. The procedure prescribed for appointment of a developer will also apply to appointment of a contractor in self-redevelopment projects.

Under the new rules, at least one-fifth of a society’s members can seek a special general body meeting on redevelopment. The committee has to take note of the application within eight days and convene the meeting within two months, with the agenda circulated 14 days in advance.

The meeting will require a two-thirds quorum, while members unable to attend physically for specified reasons can participate remotely. At least 51% of the total membership must be physically present.

The managing committee must obtain quotations from at least three registered architects or project management consultants from government or local-authority panels to prepare the redevelopment project report, which has to be completed within two months of appointment.

At least three developer bids are required. If fewer are received, a 15-day extension followed by a further one-week extension must be provided before the available bids are placed before the special general meeting.

The developer-selection meeting must be held in the presence of an authorized officer appointed through the registrar’s office and video-recorded. A secret ballot can be demanded by one-fifth of the members.

The redevelopment agreement must be executed within three months of selection and provide for a bank guarantee, alternative accommodation or rent and deposit, and registered Permanent Alternative Accommodation Agreements.

Redevelopment documents must be available to members for free inspection. Office-bearers responsible for violations, fraud or actions detrimental to members may face action under the Maharashtra Cooperative Societies Act.