Last weekend we participated in the DNA Property ReDevelopment Fair. Two days of tremendous learning about ReDevelopment, which Mumbai is the first City in India to be facing. We bring to you the gist of our learnings.
Above: San from ADDA presenting to the Audience.
After 40 years, what happens to your Apartment Complex?
1. Breakdowns and the need for Repairs show up very frequently.
2. Most Machinery will be out of service by the OEMs. New Technology will have made most machineries in the Apartment Complex obsolete.
3. The rent/resale value commanded by such old Building will be substantially lower than newer Buildings in the same area.
4. FSI (floor space index) allowed in the area will have increased. Broadly, the allowed FSI in an area indicates the maximum number of floors that can be built in the area. The Municipal Corporation allows this depending on the infrastructure avaialibility in that area, and the housing stock demanded by market conditions.
The above will encourage the Society/Association to consider Re-Development of the Property
What is Property Re-Development.
1. The Society/Association selects a Developer who will take the Re-Development Project. Various Commercials are negotiated, structure, design, FSI of the new Building, construction duration are agreed upon.
2. When the Project starts, existing Residents vacate, and move to a temporary accommodation. The Developer provides agreed compensation towards the rent of the temporary accomodation.
3. Regular clearances for the Building are pursued time-to-time before, during and after the Construction process.
4. The new Building is constructed, existing Owners are given their flats as per the agreement (sometimes 2 flats, or a larger flat), and remaining Flats are sold by the Developer to fresh buyers.
While Re-Development is a few decades away for most Cities, it is quite a pressing topic in Mumbai today. 40+ yr old dilapidated apartment buildings stand in prime locations.
ADDA participated in the DNA Property Re-Development Fair, and understood that there are many issues in the Re-Development project.
In fact, issues that are seemingly GREATER than a fresh Development project by a Builder.
Interestingly the Builder seems to have a bigger problem here than the Society/Association!
2 main problems faced by Builders.
1. Lack of Trust. This is not lack of trust from the Society on the Builder But lack of trust by the Owners on the Society/MC members!
Society struggles to receive consensus from Owners on Project Start dates, Structure and Design (which will decide on total carpet area each Flat gets. E.g., whether to have a balcony or not)
2. Lack of Continuity. A Re-Development project can take anywhere between 2 yrs to 5 years. The Builder sincerely prefers that the MC members who are representing the Society remain unchanged during this period. This helps the Builder not repeat various nitty grit ties of the Project/Agreements to each new MC.
However, that is not practically possible. Personal and Job related exigencies often have the main MC members step down.
While there are policies being worked upon to tackle other issues in a Re-Development project, above two pain points can be addressed to a GOOD measure using ADDA.
Above: ADDA stall at the DNA Re-Development Fair. More Pictures.
How ADDA can help
1. Use the Communication Features
Having an Online Forum, NoticeBoard, Email/SMS Broadcasts, Opinion Poll brings in inclusive Communication. All Owners are kept equally informed, thereby removing any suspicions of knowledge-hoarding by the MC members. Owners are confident that a few Owners (MC members) are not receiving preferential terms from the Builder. This is especially important for Non-Resident Owners (which is the majority in most old Buildings), as they are unable to participate in physical meetings where information is disseminated.
2. Use the Management Features
Having all Meetings between the Society and Builder documented on the Online Meeting Tracker brings in transparency as well as continuity. Digitising important Society Documents and storing in the Document Repository of your ADDA protects you against any loss of hardcopies during vacating the premises.
You need to collect special funds towards the Re-Development, also keep Track of Rental Compensations paid out to each Member. This ensures if any Member has not received their compensation, the Society can represent them. Any ad-hoc fees that the distributed Owners need to pay for legal or other professional charges, are best done using the Online Payment Gateway.
Above all, when the Building has been razed to the ground, you have no Society Office. Nowhere to meet, no physical files to pore in together.
That is when you reap the maximum value of your ADDA – which becomes your virtual Society Office!
If you are a Builder, we recommend you to get the Society on an ADDA, which will guarantee transparency (Trust) and Continuity throughout the Project Duration.
If you are a Society, get an ADDA, and add the Builder as a limited User, so he can upload milestones and other communication from time-to-time during the Re-Development.
If you are already on ADDA, rest assured, you will have what you need on your Society Portal 10, 20, 40 years from now! When it comes to challenges that bother Apartment Complexes, ADDA remain the first to learn about it, and pioneer the solution.
Here is the coverage in DNA, Mumbai Edition