For Regular Updates Please Follow Our WhatsApp Channel Click Here
Last updated on October 7th, 2024 at 02:20 am
Real Estate Redevelopment & Society Redevelopment Processes, in urban areas and in many States face several delays and hurdles.
These delays often lead to unnecessary financial losses for society members and real estate developers.
Here are some of the key challenges:
I. Approval from Society Members Or Residents
Securing consent from a majority of residents can be sometimes difficult.
The real estate redevelopment process/projects normally need the approval of a minimum of 51% of society’s members.
Many a time, a few Members having no knowledge of the Redevelopment Sector mislead the Society Members resulting in delays in the Society Redevelopment.
A Few Society Members misquote & challenge the opinion & advice of the Redevelopment Experts for their own motives delaying Society Redevelopment.
II. Unrealistic Demands By Society Members Or Residents
It has been observed that a few society members influence the majority of the society members to raise and ask for unreasonable demands from the developers, which also results in unnecessary hurdles & delays in the society redevelopment process.
Many a time it has resulted in the cancellation of the deal with the developer and the society members being left in a lurch for 20 to 30 years, with no developer willing to redevelop their society. Some of the examples of the same are Nutan Nagar Cooperative Housing Society and Khira Nagar Cooperative Housing Society.
[Also Read: Safety Guidelines In Society Redevelopment – Building Redevelopment Process]
III. Regulatory Approvals
Obtaining necessary permits and approvals from various government bodies is time-consuming and complicated. Delays in these mandatory regulatory approvals do delay or stall redevelopment projects.
Sanctions or clearances from various bodies and Planning Authorities like the RERA, State Housing Department / MHADA, Building Proposal Department of the Municipal Corporations, the Environmental Clearances from the Ministry of Environment & Forests (MOE&F), and the Ministry of Civil Aviation are sometimes very time-consuming.
[Also Read: The Functions & Duties Of A Redevelopment Committee In Redevelopment Of Cooperative Housing Society]
IV. Financial Viability
Ensuring the financial viability of the project is crucial. Developers need to have the required sufficient financial capacity to complete the real estate redevelopment project without unnecessary delays. Mismanagement of funds can lead to real estate redevelopment projects being abandoned midway.
[Also Read: Revealed: RERA Carpet Area, MOFA Carpet Area, Super Built Up Area In Redevelopment]
V. Developer Credibility
Choosing a credible developer is essential. There have been instances where developers have abandoned projects due to financial issues or mismanagement, leaving residents in a lurch.
VI. Temporary Relocation
Residents need to be temporarily relocated during the period of the redevelopment process. Finding suitable accommodation along with managing the logistics of moving can be a hassle for many.
Sometimes some Society Members due to lack of knowledge create some issues related to the amount of Transit Accommodation Rent / Hardship Allowance etc.
A few society members misleading the society members also results in financial losses of all the society members, as the delay then results in the increment of rent at other places available for the society members, and the transit accommodation rent/hardship allowance remains the same for the first year as mentioned in the selected bid during the selection of a developer.
However the same may increase subsequently from the next year onwards as per the terms & conditions mentioned in the development agreement between the society and the developer.
[Also Read: Carpet Area Vs Built Up Area In Booming Real Estate Development & Redevelopment Process]
VII. Legal Disputes
Legal disputes between Society Members or residents, developers, and regulatory bodies can arise, further delaying the project. Ensuring clear and transparent agreements can help mitigate these issues.
Sometimes a few Society Members are misled or provoked to file frivolous litigations thereby bringing in unnecessary delays or hurdles in the Society redevelopment process. However, those frivolous litigations are later dismissed by the Courts after imposing heavy fines or penalties on such litigants.
VII. Infrastructure and Amenities
Upgrading infrastructure and amenities to meet modern standards can be challenging. This includes ensuring adequate water supply, electricity, and other essential services.
[Also Read: Mumbai Real Estate Market Huge Jump By 8% In August 2024]
IX. Market Conditions
All or any kinds of fluctuations in the real estate market impact the profitability, feasibility, and viability of redevelopment projects. Developers need to be prepared for incidents like market falls & market downturns.
X. Environmental Concerns
Redevelopment projects must also address important environmental concerns like waste management, pollution control, and maintaining green spaces.
XI. Community Resistance
In some cases, there may be resistance from a particular community, especially if the redevelopment project significantly alters the character of the neighborhood/locality.
Conclusion
Given the above facts, it is now clear how unnecessary confusion is created by a few Society Members having no knowledge about real estate and society redevelopment whatsoever, and mislead the other innocent Society Members for fulfilling their motives or intentions, thereby resulting in an unnecessary delay and hurdles along with financial losses in the redevelopment of society and real estate redevelopment projects.
Despite all these challenges, redevelopment projects can significantly prevent unnecessary financial losses and enhance the quality of life for residents by providing modern amenities and safer living conditions. Proper planning, transparent communication, and choosing the right developer can help overcome these hurdles.
Your FAQs Answered Here:
What is IOD Full Form in Real Estate? IOD in Real Estate?
In real estate, IOD means and stands for Intimation of Disapproval. This preliminary approval is issued by the local municipal corporation, especially in cities like Mumbai. It signifies that the proposed project plans adhere to zoning, building, and regulatory standards.
Obtaining an IOD is a critical step before receiving a Commencement Certificate (CC), which legally permits the start of construction. Without an IOD, developers may face financial setbacks, project delays, and legal complications.
What is EDC Full Form in Real Estate?
In real estate, EDC means and stands for External Development Charges. These fees are imposed by local authorities on developers to cover the cost of developing external infrastructure. This infrastructure includes essential services such as roads, water supply, sewage systems, electricity, and other public amenities.
Understanding EDC is vital for both developers and buyers, as it affects the overall cost of property development and, consequently, the pricing of real estate projects.
What is FAR in Real Estate?
In real estate, FAR means & stands for Floor Area Ratio. This key metric is used in urban planning and real estate development to determine the relationship between a building’s total usable floor area and the size of the lot it occupies.
The formula to calculate FAR is:
FAR=Gross Lot Area ÷ Total Building Floor Area​
A higher FAR shows a denser construction, which is mostly seen in urban areas. Local governments use FAR to control building density and promote sustainable development.
Understanding FAR is crucial for developers as it dictates the maximum buildable area on a plot, influencing project feasibility and design.
What are Concessions in Real Estate?
In the field of real estate, concessions are the discounts or incentives offered by either the buyer or seller to facilitate a property transaction. These concessions take various forms and are typically negotiated during the deal-making process. Here are some common types:
Seller Concessions: These are costs that the seller agrees to cover to make the deal more attractive to the buyer. Examples include:
Closing Cost Assistance: Sellers may cover part or all of the buyer’s closing costs, such as title insurance, appraisal fees, and lender fees.
Rate Buydowns: Sellers might pay for mortgage discount points to help buyers secure a lower interest rate.
Pre-paids: Covering upfront costs like prorated property taxes, homeowners insurance premiums, or HOA dues.
Home Warranty: Offering to pay for a one-year home warranty to provide peace of mind for the buyer.
Repairs: Agreement to cover all the costs of necessary repairs identified during the process of home inspection.
Buyer Concessions: Less common, but these can include the buyer agreeing to a quicker closing date or waiving certain contingencies to make their offer more appealing.
Concessions are strategic tools in real estate transactions, often used to make a property more attractive or to facilitate a smoother closing process. They can be particularly useful in a buyer’s market, where sellers may need to offer incentives to attract buyers.
Comments are closed.