𝐍𝐞𝐰 𝐑𝐞𝐝𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭 𝐑𝐮𝐥𝐞𝐬 u/s. 79(A)

𝐍𝐞𝐰 𝐑𝐞𝐝𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭 𝐑𝐮𝐥𝐞𝐬 𝐮𝐧𝐝𝐞𝐫 𝐒𝐞𝐜𝐭𝐢𝐨𝐧 79(𝐀) 𝐨𝐟 𝐭𝐡𝐞 𝐌𝐚𝐡𝐚𝐫𝐚𝐬𝐡𝐭𝐫𝐚 𝐂𝐨-𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐯𝐞 𝐒𝐨𝐜𝐢𝐞𝐭𝐢𝐞𝐬 𝐀𝐜𝐭, 1961 (𝐄𝐟𝐟𝐞𝐜𝐭𝐢𝐯𝐞 4𝐭𝐡 𝐉𝐮𝐥𝐲 2019)

Introduction

Redevelopment of co-operative housing societies has become a crucial necessity in urban Maharashtra. With thousands of buildings aging, societies often struggle with safety, structural issues, and the need for modern amenities. To address persistent challenges and complaints regarding redevelopment, the Government of Maharashtra issued revised directives under Section 79(A) of the Maharashtra Co-operative Societies Act, 1961, through a Government Resolution (GR) dated 4th July 2019, replacing the earlier GR of 3rd January 2009.

These new rules aim to bring greater transparency, accountability, and fairness to the redevelopment process, protecting the rights of society members while ensuring smooth execution of projects.

Why Were the New Redevelopment Rules Introduced?

The Government had been receiving numerous complaints about redevelopment projects.

The key issues included:

*** Members not being taken into confidence.**

*** Lack of transparency in tendering processes.**

*** Arbitrary appointment of developers.**

*** Violations of co-operative laws and bye-laws.**

*** Poor coordination between architects and consultants.**

*** Absence of proper planning and project reports.**

*** Unfair agreements with developers.**

The 2019 GR was designed to resolve these problems by mandating uniform procedures for decision-making, developer selection, and execution of agreements.

Applicability of the 2019 Rules

The revised directives apply to all types of redevelopment, including:

• Redevelopment by a developer under an agreement.

• Self-redevelopment by societies.

• Cluster redevelopment by federations of societies.

• Group redevelopment initiatives.

This ensures that no matter which redevelopment model is chosen, societies must follow transparent and standardized procedures.

Initiating Redevelopment: The Role of the Special General Meeting (SGM)

1. Member Requisition: At least 1/5th of society members must request a Special General Meeting (SGM).

2. Notice Period: The Managing Committee must convene the SGM within two months and issue a 14-day prior notice.

3. Agenda: The SGM should consider redevelopment proposals, suggestions, and appointment of professionals.

4. Appointment of PMC/Architect: Quotations must be invited from at least three registered architects or government-approved Project Management Consultants (PMCs). One PMC/architect is selected at the SGM.

This ensures collective decision-making and prevents unilateral actions by the managing committee.

Transparency Measures

To strengthen trust among members, the rules require societies to:

• Create a dedicated website for redevelopment.

• Upload all notices, feasibility reports, minutes of meetings, and project documents.

• Send communications via e-mail, post, or hand delivery.

• Notify the Registrar about the website.

• Display notices prominently on the society notice board.

These steps ensure every member has access to information and can actively participate in the process.

Quorum and Voting Requirements

Quorum: 2/3rd of the total members must be present at an SGM.

Approval Threshold: At least 51% of the total membership strength must approve redevelopment.

If quorum is not achieved, the meeting is adjourned. If still unsuccessful, redevelopment cannot be reconsidered for three months.

This rule strikes a balance between majority decision-making and protection of minority interests.

Role of the Architect/PMC

The appointed expert is tasked with:

• Conducting land and building surveys.

• Reviewing conveyance/title documents.

• Assessing FSI and TDR potential.

• Preparing a detailed feasibility report within two months.

• Considering residential area, commercial space, open space, parking, and construction specifications.

This report becomes the foundation for inviting developer tenders.

Tendering Process

***** Draft tender documents must be prepared after feasibility approval.

• At least three tenders are required for competitiveness. Extensions may be granted if fewer are received.

• Tenders are opened in a Managing Committee meeting in the presence of members and bidders.

• The PMC/architect prepares a comparative chart for evaluation.

This ensures fair competition and informed developer selection

Selection of Developer

• Selection must take place at an SGM in the presence of an Authorized Officer from the Registrar’s office.

• The meeting must be video-recorded.

• Developers must have at least one MahaRERA-registered project.

• Written consent of at least 51% of the total membership strength is mandatory for finalization.

Registrar oversight ensures impartiality and accountability in the selection process.

Key Features of the Development Agreement

The agreement with the selected developer must include:

1. Completion timeline: Within 2 years (extendable to 3 in special cases).

2. Bank Guarantee: 20% of the project value.

3. Alternate accommodation/rent for members during construction.

4. Registration of both the Development Agreement and Permanent Alternate Accommodation Agreements (PAAA).

5. Non-transferability of developer’s redevelopment rights.

6. Vacating flats only after legal approvals and execution of registered PAAA.

7. Clear mention of carpet area as per RERA requirements.

8. Provision for dispute resolution under Section 91 of the Act.

9. Flat allotment preferably on the same floor or by lottery in Registrar’s presence.

These provisions safeguard members rights and ensure financial protection.

Cluster Redevelopment

The rules also allow cluster redevelopment through federations of societies:

• Quorum of 2/3rd members across societies is required.

• Approval by at least 51% of total members in each society.

• Written consents must be obtained and submitted to the federation.

• At least 60% of members across all societies must approve.

This framework facilitates large-scale planned redevelopment with collective decision-making.

Importance of the 2019 Redevelopment Rules

The 2019 Rules mark a significant shift in Maharashtra’s housing redevelopment framework:

Transparency through digital platforms and video recordings.

Member empowerment via quorum and consent requirements.

Accountability with Registrar supervision and bank guarantees.

Fairness with uniform agreements and restrictions on conflicts of interest.

They provide a roadmap for smoother, more reliable redevelopment projects while minimizing disputes and delays.

Conclusion

The New Redevelopment Rules under Section 79(A) of the Maharashtra Co-operative Societies Act, 1961 (effective from 4th July 2019) have brought much-needed clarity and safeguards to housing society redevelopment in Maharashtra. They empower members, enforce transparency, and create accountability at every stage.

At Asahi Legal, we specialize in guiding housing societies and developers through the redevelopment process. From drafting Development Agreements and ensuring compliance with MahaRERA, to advising on disputes under Section 91, our team offers end-to-end legal expertise tailored to protect your interests.

Is your society considering redevelopment? Do you want to ensure the process is legally compliant and member-friendly?

📞Contact Asahi Legal today for expert guidance. Our lawyers will help safeguard your society’s rights and ensure a smooth redevelopment journey.

This article is for general information only and is not legal advice or an invitation to engage the firm. Laws and judgments change; please obtain specific legal advice before acting.