Here’s everything you need to know

about Self Redevelopment.

Self-Redevelopment is a type of redevelopment where the entire process and all decisions are
controlled by the members of the society instead of giving it to a Builder is called.

Pre-requisites for starting Self Redevelopment Process in

Mumbai
Before a housing society decides to start the self redevelopment process, it is a good idea to check
if they have all the necessary requirements to start the procedure for self redevelopment.
Following conditions should be met for a society to start the self redevelopment process:
1. First and foremost, the Housing Society should be the owner of the land, i.e. it should have the
Conveyance Deed in its name or should have the land purchase agreement in its name.
2. Second, the housing society has to be registered under the Maharashtra Cooperative Societies
Act, 1960 as a Cooperative Housing Society.
3. Third, the housing society should be a member of The Mumbai District Central Co-operative
Bank Ltd (MDCC Bank) to avail self redevelopment loan under the Self Redevelopment Scheme,
2018. If the society is not a member of this bank, they can become a member by purchasing
shares of the bank.
4. Finally, before applying for a loan for Self Redevelopment of the society with MDCC Bank, all
pending Government dues have to be cleared off. Also, as on the date of application, Society
Maintenance from all members needs to be paid with no arrears.

Starting the procedure for Self Redevelopment

Once a housing society has checked that it fulfils the requirements to start the procedure for self
redevelopment of their housing society, they can start with the self redevelopment process:
1. The first step is to get the consent of all the society members on taking the Self-Redevelopment
approach for redevelopment of their premises. A resolution has to be passed by calling a Special
General Body Meeting.
2. Get copies of all the required documents in place, which include:
1. Land purchase agreement or conveyance deed – Land ownership proof
2. Copies of original plan of the building, 7/12 extract and property card
3. Audited financial statements for last 3 financial years
4. Copy of updated byelaws and registration certificate of the society
5. List of committee members
6. Details of all society members including their unit sizes as per the actual plans.
3. The society then needs to appoint a Project Management Consultant to make a self-
redevelopment project report (feasibility report) which provides important details like
development potential as per the latest norms, overall budget and cost break-up for the project
and the possible benefits to the society members. This report lays the foundation for the entire
project and is referred to at different intervals as a central guideline for making the project
reach its success as envisaged.
After taking the decisions based on the Feasibility Study report, the society then moves ahead to
appoint Architects, Legal Advisors, Chartered Accountants, Contractors who then guide the society at
various stages of the self redevelopment process.
Along with the documents mentioned above, the society also needs to have in hand copies of
agreements entered into with the Architects, Chartered Accountants, Legal Advisors etc.
Once all plans have been laid out and all documents are in place, the next step is to approach a bank
for funding for the self redevelopment project.
Funding for the self redevelopment project
All the above mentioned sets of documents have to be submitted to MDCCB along with the
application form for getting a Self Redevelopment loan.
MDCC Bank or MDCCB better known as the Mumbai District Central Co-operative Bank Ltd is
currently the only cooperative bank in Mumbai authorized to provide loans for self redevelopment
projects in Mumbai.
MDCCB provides loans covering up to 95% of the project cost; the remaining 5% is required to be
arranged by the members of the Housing Society. MDCC Bank provides the loan at 12.5% simple
rate of interest.
Depending upon the project cost, the loan repayment period and the moratorium period varies.
Moratorium period is that duration during which the interest is incurred on the disbursed amounts
but the society does not need to repay anything to the bank.
If the project cost is less than 50cr, the total loan period is of 7 years with a moratorium period of 2
years. If the total project cost exceeds 50cr then the total loan period is of 10 years with a 3 year
moratorium period.
The MDCC Bank takes into consideration rents for alternative accommodation, shifting, re-shifting,
TDR, fungible premium, professional fees, brokerage, construction cost and any other additional
amenities planned in the redeveloped society like play area, garden etc. for calculating the Project
Cost.
It is important to note that MDCC Bank will only provide the 95% part of the Project Cost after the
remaining 5% has been collected by the society members.
In case the society members are unable to generate the required 5% amount themselves, Project
Management Consultants .
Selecting the right team is CRITICAL for the project success.
Every player in this selected team of the self redevelopment process has a very crucial role to play;
hence it is important to get experienced and knowledgeable professionals on board for their
requisite roles in the project.