Delhi’s redevelopment policy: The rush before the announcement

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Published: November 28, 2015 8:03:33 AM

As developers and residents keenly await the notification on the policy, hectic parleys are on to reconstruct the group housing societies

delhi development authorityRESIDENT’S ROLE: Residents must look to incorporate all standard clauses that safeguard the society and its members into the development agreement as it eliminates the possibility of disputes. (Source: Express photo by Amit Mehra)

Even though the Delhi Development Authority is yet to notify the regulations detailing operationalisation of the redevelopment policy for the national capital, developers in the region have started making their move in order to gain the first-mover advantage and are already in discussions with various group housing societies (GHS) to take up their area for redevelopment, once the policy is rolled out.

The noise around redevelopment has gained prominence in the recent past, given the dilapidated condition of several GHS’ across the city that are around 30 years old and are vulnerable to the increasing threats of an earthquake. Experts point out that while DDA needs to expedite the process of rolling out the guidelines so that redevelopment can begin in Delhi, they also say that the residents will have to be careful while choosing a developer to undertake the work and be very vigilant in laying down the terms and conditions in the memorandum of understanding to be signed with them.

The need

A couple of earthquakes in the recent past have stirred a debate around the condition of several GHS’ across the city and the threat that the residents living there face. “Redevelopment is the need of the hour as a number of buildings in Delhi are in dilapidated condition and the policy for the same should be laid out soon, so that residents have the choice to get their societies redeveloped,” says PSN Rao, chairman of Delhi Urban Art Commission (DUAC).

It is also important to note that Delhi is located in seismic zone 4 which makes it highly vulnerable to earthquakes and the GHS’ that have been built decades ago are not equipped to deal with any such eventuality. Many feel that the poor quality of construction led to the deterioration of most housing societies and there is hardly any room to renovate those structures at this stage. In such a situation, redevelopment seems to be the only plausible option that can help mitigate both man-made risks and natural disasters.

Even as developers and residents are keenly waiting for the policy to be notified, hectic parleys are on between the developers and residents of the housing societies for redevelopment. Mohit Goel, CEO of Omaxe says that his company is in talks with over 40 such societies and is meeting the resident welfare associations in the northern and eastern part of the city.

“We are waiting for the notification but as a requirement we need to take approval from all the flat owners in a society and it is a tough task to negotiate with 200 odd residents. So we have started early, as the entire process takes a lot of time and we have to be ready with the groundwork,” says Goel.

While redevelopment will need the existing structures to be demolished, there are expectations that the policy may allow additional floor area ratio (FAR) and ground coverage.

“The redevelopment will increase the FAR and bring in fresh inventories within Delhi. The additional FAR will boost the housing and urban development in the national Capital. Also, developers can add floors up to a stretch as they can expand vertically or horizontally due to the accessibility of the land,” says RK Arora, chairman, Supertech Limited.

While approving the transit oriented development policy for Delhi, the Ministry of Urban Development has already approved increase of the FAR from 250 per cent to 400 per cent. FAR is the ratio of floor area of the building to the plot of land on which the building is located and a higher FAR means vertical growth. So if a particular locality has FAR of 1:1 then it means that either a developer can build a one-storey building on the entire piece of land or two-storey building on half of the land or four-storey on a quarter of the land area.

The concerns and issues

Developers say that convincing all residents in a society to agree for redevelopment is the most challenging part. Experts, however, say that the concerns of residents are not misplaced as one needs to be very careful while negotiating. Rao says, “At a time when homebuyers have witnessed significant delay in possession by developers, it is very tough to trust them with their promises. So, people in general are very apprehensive in dealing with developers and they are concerned if the developer will redevelop the property in quick time.”

Even developers feel that trust is the biggest factor coming in the way of convincing the residents. “There is a huge trust deficit. Residents are concerned if they will get the possession of their house within the promised time,” said Goel.

If that is a concern among the residents, Rao says that societies and RWAs must only consider deal with a reputed developer who has a proven track record on delivery of project, has strong financial condition and has delivered quality construction.

Residents must also note that after they have finalised the developer, they must look to incorporate all the standard clauses that safeguard the society and its members into the development agreement as it eliminates the possibility of disputes at a later stage.

It is also important to note that there have been some unpleasant experiences by societies in other cities that went for redevelopment.

“There are some rather prominent banners among the developers who have defaulted on their redevelopment promises. It is quite evident that selecting a dependable and trustworthy builder who is familiar with and knowledgeable about the processes involved is fundamental to ensuring successful redevelopment,” says Ramesh Nair, COO- Business, JLL India, in a note.

However, that is not the only issue. Developers point that legality of the property is another major concern. According to a developer, who is in discussion with residents, in many cases the property papers are not intact and so it is a challenge for the developer to go ahead in such cases. Another issue that has come to the fore is the registration of additional flats in the society. A developer said that there is no clarity on how with the registration of additional flats in the redeveloped society happen.

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