All About Redevelopment

Essence of Redevelopment

India had undergone a Real Estate boom in the late 1980s and early 1990s when Residential Buildings (in the form of Society's or Apartments) were constructed to cater to the needs of the affluent people. Youngsters with aspirations of staying in a gated society or a standalone building in their energy and exuberance booked flats which did not have concepts of Lifts/ Parking/ Solar/ etc.

Cut to the current situation in 2021, the same Energetic Couples have turned to their 50s, 60s and 70s and now feel the great need for Lifts (especially those who stay on the top floor in the 3 storied or 4 storied building), Parking (since 4 wheelers and 2 wheels have become essentials now) and other amenities. Added to that, due to passage of time the maintenance costs of the old buildings increase not just on the Revenue expenses but also major Capital expenses like Painting, Plumbing, Electrical wiring, etc. All this combined with their daughters/ sons staying abroad or in other city makes it cumbersome for the once young couple to stay in such high maintenance and low amenities buildings. So, what can be done about this – Continue to stay this way throughout their life or Shift to a different place with better amenities. What if there is a better solution – Continue to stay in the same building with better amenities by going for Redevelopment.

Now – What is Redevelopment?

Redevelopment is a combination of two words "Re" and "Development". As we all know "Development" is developing the building from the ground by building a structure for living or for commercial purpose. "Re" signifies the situation where there is an already existing building which is razed down to build a new structure to accommodate existing Tenants on completion of construction.

How does Redevelopment work?

What is in it for Flat Owners?

Flat owners from a property would handover and in lieu of the same they will get a bigger flat (if the property is in a high potential area) with latest amenities which can include things like Lifts, Parking, Solar, Vermiculture. More so during the construction period, their Rentals, Deposits are also taken care by the Developer if the potential of the plot is high enough to accommodate these charges.

What is in it for Developers?

With land parcels shrinking in the main city area, Redevelopment is the next viable proposition for Developers. The construction that took place in 1980s and 1990s majorly had a utilization of approx. 1 FSI but over the period with density of population increasing, the Development control regulations have increased the FSI available for a plot in Cities. These depend on the size of the plot, width of the road adjoining the plot/ abutting the plot, nearness to Metro (Transit oriented Development or TOD), etc. among the other factors. Developers get into an agreement with Societies to demolish the existing construction and construct new building with increased Tenement's due to the relaxed FSI regulations. Out of the total tenement's, Existing flat owners are given their share of Flats (existing area + additional area free of cost) and the remaining are sold in the open Market to recoup their construction cost and earn their share of profits.

Why to go for Redevelopment

To enjoy the same surroundings, same friends, same neighbors, and that too at a bigger place to live with new amenities – what else would you ask for? That is exactly the reason why you should explore Redevelopment.