• Re-development

My society is considering re-development. Is it required to have consent of 100% of members to initiate re-development?
Asked 2 years ago in Property Law from Pune, Maharashtra
No, majority decision will be given priority.
Devajyoti Barman
Advocate, Kolkata
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you dont need the consent of 100%of members to intiate redevelopment . it has to be considered in general body wherein 3/4th of society members are present .with a view to ensure transparency in societies seeking to undertake redevelopment projects, the state co-operative department has, , issued guidelines for societies to follow under section 79 (A) of the Maharashtra Co-operatives act, 1960.
Ajay Sethi
Advocate, Mumbai
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CIRCULAR ON REDEVELOPMENT

             All the Co-op. Hsg. Societies in the 
State of Maharashtra u/s 79(A) of  
MCS Act 1960 to pass order 
regarding Redevelopment of 
Cooperative Housing Societies                      

Govt. of Maharashtra 
 No. S.G.Y.2007/L.No. 554 /14-C 
Co-op. Marketing and Textile Dept.
Date  :  3rd January 2009
----------------------------------------------------------------------------------
Since there are large number of projects under process for Re-development of the Buildings of the Co-op. Hsg. Societies in the State of Maharashtra.  We are in receipt of the numerous complaints received from the members against the Management of the Co-op. Hsg. Societies which are undergoing the Re-development process. The natures of complaint received from majority of the Co-op Housing Societies undergoing redevelopment are as given below.

1)	While carrying out the process, members are not taken into confidence.

2)	Transparency not observed in the Tendering process.

3)	Appointment of Contractors in a haphazard manner.

4)	Breaches of the provisions of the MCS Act, /rules and Bye-laws in the working of the society.

5)	Lack of Co-ordination between appointed Engineer and Project Consultants.

6)	Non preparation of Feasibility Report.

7)	Proper procedure not followed in the selection of Tender. 

8)	Disparities in the Development Agreement.

And

Since, there are no laid down guidelines and / or firm procedures declared, based on the various complaints received and discussion held with the concerned experienced professionals the Commissioner for co-operation and Registrar a Co-op. Societies, Maharashtra State, Pune had appointed a Study Group under the Chairmanship of the Jt. Registrar of Co-op. Societies, CIDCO to consider various types of complaints on the subject and discuss the same with all the concerned parties in the Sector.  The Study Group after discussion with all the parties in the Co-op. Housing field opined that Rules and Regulations for the Redevelopment of the buildings of co-op. Hsg. Societies are very essential.

As such, under Section 79 (A) of the M.C.S. Act 1960, the Government is issuing following Orders which are as under:

The following order will be called as “Order of Redevelopment of the Co-op. Hsg.  Society’s Buildings”.

1)	TO CALL A SPECIAL GENERAL BODY MEETING OF THE SOCIETY TO DISCUSS THE REDEVELOPMENT OF THE SOCIETY’S BUILDING/S.

For the Co-op. Hsg. Societies in which the Redevelopment work of the buildings is required to be undertaken, an application of requisition to hold a Special General Body Meeting of the members of the society to consider and discuss the Redevelopment Project and suggestions on the same, is to be submitted to the Hon. Secretary of the Managing Committee which is properly elected as per provisions of the society’s Bye-laws and also constituted as per the provisions of the MCS Act 1960.  The requisition application is to be signed by not less than 1/4th of the total members of the society.

2)	TO CALL THE SPECIAL GENERAL MEETING
 
As per Sr. No.1, on receipt of requisition for calling the meeting, the Managing Committee of the society, within 8 days of the receipt of the application, should consider the same and within a period of 1 month the Hon. Secretary will call the General Body Meeting of the members of the society giving 14 clear day notice for which acknowledgement will be collected from every member and maintained in the records of the Society.

Before holding of the meeting the committee shall call quotations from minimum five Architects or Project Management Consultants who are empanelled with the Government or any local competent Authority. After considering all the quotations received, the Special General Meeting will select one of the Experts.

The SGM will consider the business as per following Agenda.

(1)	To take primary decision, after considering the demands and suggestions from the members, on the Redevelopment of the Society Building/s

(2)	To select expert and experienced Architect / Project Management Consultant, who are empanelled by Government / local Authority, for the work of Redevelopment and frame Rules / conditions of their work.

(3)	To submit the project of proposed Redevelopment of the building. 

3)	TO RECEIVE WRITTEN SUGGESTIONS FOR THE MEMBERS ON THE REDEVELOPMENT OF BUILDING 

	The members of the society can submit their inputs, suggestions, recommendations and also names of known experienced and expert Architects/Project Management Consultants for the redevelopment project.  However this should be submitted to the Committee, in writing, 8 days before the date of the meeting.  Further approval letter of the referred Architects / Project Management Consultants shall also be submitted stating that they are interested to take up work of Redevelopment. 

4)	DECISIONS TO BE TAKEN IN THE SPECIAL GENERAL MEETING (SGM)

The quorum for the SGM called to consider subject of Redevelopment of the society’s building will be 3/4th of the total number of the members of the society.  In case of no quorum, the meeting will be adjourned for 8 days and if there is no quorum attained for the adjourned meeting under such circumstances such adjourned meeting will be dissolved considering that the members have no interest in the Redevelopment of the society’s building/s.  On condition of attaining required quorum the suggestions, objections, recommendations and references placed by the members regarding Redevelopment of society’s building/s will be considered and noted in the minutes of the meeting along with the observations made by all the members.  Thereafter a majority of 3/4th of the members present at the meeting is required to pass a primary resolution regarding the decision for Redevelopment of the society building. After the approval of the Resolution for Redevelopment the Meeting will consider following business.

(a)	To approve the Terms and Conditions along with the scope of the work to be carried out by the eligible Architect / PMC who can be selected from the Panel of Govt./ Local Authority for the Building Redevelopment work.

(b)	To submit proposal of Building Redevelopment Project.

5)	TO CIRCULATE MINUTE OF THE MEETING TO ALL THE MEMBERS. 

The Hon. Secretary of the society should prepare the minutes of the SGM and circulate it to all the members within 10 days.  The acknowledgement against receipt of the copy of minutes taken from the members should be kept on record. Further, one copy of the minutes should be sent to the office of the Registrar.

6)	TO ISSUE LETTER OF APPOINTMENT TO THE ARCHITECT / PMC

The Hon. Secretary of the society as per the decision taken in the Special General Body shall issue Letter of Appointment to the Architect / PMC selected by the SGM within 15 days of the meeting.  Further the committee will sign the Agreement containing Terms and conditions passed in the SGM, with the Architect / PMC.

7)	THE INITIAL WORK TO BE CARRIED OUT BY THE ARCHITECT / PMC.

a)	To carry out survey of the Land and  Building.

b) 	To seek information regarding the conveyance of the society’s land.

c) 	To seek information about available F.S.I. and T.D.R. for the building and land considering Rules of the MHADA / S.R.A. / Municipal Corporations, as applicable from time to time, according to ownership of the land and current provisions of the Government.

d) 	To prepare a feasible project report considering suggestions, references and recommendations  made by the society members about the redevelopment taking into account the residential area, commercial area, open spaces, Garden, Parking, the specification of construction etc. 

e)  The Project Report shall be prepared and submitted to the committee by the Architect / PMC within 2 months from the date of their appointment.

8)	BUSINESS  AFTER RECEIPT OF THE REDEVELOPMENT PROJECT REPORT

a)	After receipt of the Redevelopment Project Report and considering the suggestions presented by society members, the Hon. Secretary of the society will call a joint meeting of committee members and Architect / PMC to obtain approval from majority towards the submitted Project Report.  A proper Notice mentioning the day, date, time, place etc. of the meeting will be displayed on the Notice Board of the society.  The Notice will also inform that the copy of the Project Report is available to the members for the inspection.  Also the members will be informed that they can submit their suggestions, before 8 days of the Committee Meeting.  This Notice about members suggestions shall be given to every member and their acknowledgement, shall be kept in the records of the society.

b) The Hon. Secretary shall send all the suggestions received from the members to the Architect / PMC for their consideration, 7 days before the Jt. Meeting.

c)	The said Jt. Meeting will consider the suggestions, recommendations received from members along with the opinion expressed by the Architect / PMC, and after detailed discussion on all the related matters and after incorporating the required corrections, the Project Report will be approved by the meeting.  The provisional draft of the Tender will also be prepared and day, date and venue will be finalized for the next joint meeting for discussing and finalising the draft of the Tender document. The Architect / PMC will prepare the draft Tender for inviting competitive offers, where in the one of the primary requirements (Unchangeable) carpet area or corpus fund will be decided and considering the other technical aspects tenders will be invited. This will help to receive competitive Tenders from well known, expert and experienced Developers.  The members of the society can forward this information to their choice of renowned and experienced Developers.

9)	TO  PUBLISH  LIST  OF  TENDERS  RECEIVED 

(a) 	The Hon. Secretary of the society will prepare list of the Tenders received till the last day of receipt and publish it on the Notice Board of the society.

(b) 	Within 15 days of the last date of the receipt of the Tenders, the Hon. Secretary of the society will call the Special Meeting of the Managing Committee.  The meting will be attended by the official representatives of the Developers where interested members of the society can attend as observers.  All the received Tenders will be opened in the presence of all the people participating in the meeting.  The Architect / PMC will conduct scrutiny of all the Tenders and prepare a comparative chart.  The expertise, status, experience and competitive rates offered etc. will be examined by the Architect / PMC and a selection of minimum 5 Tenders and in case of less than 5 Tenders received, list of all of them shall be prepared to be placed before the SGM.  The concerned Tenderers shall also be immediately informed accordingly.

10)  	SELECTION  OF A  DEVELOPER 

a)	The office of Registrar to appoint an Authorised Officer for the SGM.

With the help of the appointed Architect / PMC, selection of the developer to be carried out from those selected tenders, wherein the selection of one developer on the basis of experience, caliber, financial status, technical expertise and competitive rates is to be carried out in the Special General Body Meeting, where the committee will make an application, attached with the members list, within a period of 8 days, to the Registrar, C.S. to appoint an Authorised Officer to attend a Special General Meeting which is called to select one Developer from amongst the Tenderers selected by the Consultants. The Registrar will take decision on the application and appoint Authorised Officer. 

b)	To call SGM to finalise the Tender.
  
The Hon. Secretary of the society, for appointing the developer, shall within one month of the appointment of the Authorised Officer and with his prior permission fix day, date, time and venue of the SGM.  The Notice of the said SGM will be issued 14 days before the date of the SGM which shall be hand delivered as well as sent to every member by Registered A.D. Post and the acknowledgements will be kept in the Society’s Records. Similarly the Representative of the Registrar’s Office will ensure the presence of the Official Representative of the Tenderers, whose Tenders shall be considered at the SGM.  The Arrangement for Video Shooting of the SGM, at the expenses of the society, shall also be made. Only bonafide member of the society shall be eligible to attend the SGM. Members would require to carry their individual identification papers to attend the meeting. While submitting Redevelopment proposal for approval to the concerned competent Authority it is necessary that, the complete business of selection of Developer and allied matters are carried out in presence of the Authorised Officer.

c)	If there is no quorum for SGM. 

The quorum for the SGM shall be 3/4th of the total number of members of the society.  If the quorum is not attained, the SGM shall be adjourned for 8 days.  In case of no quorum for the said adjourned meeting, the meeting will be dissolved considering that the members have no interest in the Redevelopment of the society building.  The subject cannot be brought before the any SGM for its approval for further one year.

d)	The business in the SGM for selection of the Developer.

Authorised Officer from the office of the Registrar will attend the SGM to observe the business of the meeting. On the designated day, date and time of the meeting, only in the presence of the required representative and Authorised Officer and with the presence of sufficient 3/4th quorum as mentioned, the meeting will undertake the following business. 

1. 	To give comparative information about the selected Tenders to be considered. (With regards to Redevelopment work).

2. 	To present Tenderers in serial order. (Tender Presentation)

3. 	To select one Developer, with Terms and Conditions, for the   Redevelopment of the building and finalise the Tender.

4.  	To get approval from the selected Developer.

5.   	To give information about the further work.
For appointment of Developer, 3/4th majority of the present members shall give in writing their approval. The selected developers or their representatives who do not register their presence for the S G M will be considered as having given their consent for the Redevelopment proposal and further process will be carried.

11)	DEVELOPMENT AGREEMENT
	
	The Managing Committee as per the Terms & Conditions passed in the S G M in consultation with the appointed Architect / P M C and seeking their guidance, shall make an Agreement with the Developer within one month.
	The Agreement as per the suggestions of the appointed Architect / P M C along with other important issues should also include the following points.

1. 	The completion period of Redevelopment shall be of not more than two years and in special cases not more than 3 years in case of any exigencies.

2.	The Developer will give Bank Guarantee of 20% price of Redevelopment Project. 

3. 	The Developer will try to give alternate accommodation to the members in the same area till the Redevelopment Project is complete. Otherwise he will pay monthly rent and Deposit agreeable to members or make available Transit Camps.

4.	The Agreement will be registered under Registration Act 1908.

5. 	All the new members shall be admitted in the society after completion of the Redevelopment Project and after approval of General Body Meeting of the society only.

6.	The Agreement shall have specific mention of the agreed Carpet Area.

7. 	The Development rights given to the Developer will be non transferable.

8.	The flat owners will vacate their flats only after receipt of all the legal permissions for the Redevelopment work.

9.	Those in possession of their flats will not loose their rights.

10. 	Agreement between contractor, Architect and society shall have a condition that disputes, if any, on the Redevelopment work shall be settled u/s Rule No. 91 of the Rules.

11. After receipt of the Occupation Certificate for the Redeveloped building the distribution of the flats should be preferably made in accordance to the prevailing arrangement of present floors.  In case when the Allotment of flats is required to be made by lots, only after completion of the building the Developer should make available the lottery system after completion of the Redevelopment Project.  The developer should arrange for draw of lots for the distribution of flats in presence of Registrar’s representative and video shooting of the complete process will be made.

12.	No member of the Committee or Office bearer shall be a Developer or his relative.

13.	The Building Plans which are approved by the Municipal Corporation / Competent Authority shall be again placed before the General Body Meeting for information.  A member wishing to have a copy of the approved Documents can get the same on his written application. The Committee is bound to issue the information on charging a reasonable fee.

                                                                             By Order and in the name of the Governor 

 (Dr. Sudhir Kumar Goyal)
Principal Secretary 
Textile & Co-operation
Ajay Sethi
Advocate, Mumbai
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With a view to ensure transparency in Societies seeking to undertake redevelopment projects, the Government of Maharashtra had issued a Circular bearing No. CHS 2007/CR554/14-C, Co-operation, Marketing and Textiles Department Date: 3rd January 2009 this contains a Directive under Section 79 (A) of Maharashtra Co-operative Societies Act 1960 for all the Co-operative Housing Societies in the State of Maharashtra regarding the Redevelopment of Buildings of Co-operative Housing Societies. These guidelines are applicable wherever the buildings of Co-operative Housing Societies in the State of Maharashtra are being redeveloped on a large scale.
As per the said circular For the Co-op. Hsg. Societies in which the Redevelopment work of the buildings is required to be undertaken, an application of requisition to hold a Special General Body Meeting of the members of the society to consider and discuss the Redevelopment Project and suggestions on the same, is to be submitted to the Hon. Secretary of the Managing Committee which is properly elected as per provisions of the society’s Bye-laws and also constituted as per the provisions of the MCS Act 1960.  The requisition application is to be signed by not less than 1/4th of the total members of the society.
The quorum for the SGM called to consider subject of Redevelopment of the society’s building will be 3/4th of the total number of the members of the society.
Hence in view of aforesaid,consent of 100% of members is not required
Sudershani Ray
Advocate, New Delhi
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You need to get 2/3 of the members consent to it and in writing that they consent to the same
Jeshma Mohandas KP
Advocate, Kozhikode
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1 Consultations
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1.The redevelopment decision is taken by the members of the society through special general meeting conveyed for the purpose only,

2. The necessary qurum should be there in the said SGM,

3. All decisions in this regard has to be passed in the said SGM duly following bye laws of the society,

4. In the redevelopment activity, the construction of the existing flat where an unwilling member is residing/staying, can not be destroyed to disposses him  without his consent.
Krishna Kishore Ganguly
Advocate, Kolkata
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228 Consultations
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1. Consent of all the members is not the prerequisite to initiate the process of re-development. The proposal of re-development is to be considered at the general meeting which has the necessary quorum i.e 3/4th of total membership of the society. 

2. The general body meeting can be called if 1/4th of the total members of the society require the calling of the meeting. So the consent of all the members is not required before commencing re-development.
Ashish Davessar
Advocate, Jaipur
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446 Consultations
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A. As per the guidelines (by state co-operative department), a redevelopment plan can be approved by the general body only if three-fourths i.e 3/4 of the society members are present at the meeting.

B. The Society should have a valid conveyance deed of land and building in its favor. Once the society members’ consent is taken, the society has to submit the documents to the developer / concerned person. It should contain the number of open car parking space, stilt car parking and closed parking allotted to existing society members. The development agreement should spell out the broad specifications and amenities to be offered in the new building. The agreement should mention the schedule of payments, tentative date for vacating the flats, the time period for completion, penalty clause if the developer fails to meet the deadline etc.
B.T. Ravi
Advocate, Bangalore
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29 Consultations
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