This Article is Published in “The Housing Times, December 25, 2017” issue.
Performing the Due Diligence is the preparatory step before moving on to the main Redevelopment Process of the Society. It throws light on the present situation with respect to the Society’s Property (Land & Structure) & its documentation. It highlights the potential benefits (views, expectations & concerns included) of Redevelopment that are expected by the Society & its Members. It determines the decision-making process to be adopted by the Society Members. It also helps the Society Members to constitute the Project Management Consultant (PMC) to guide them.
The Managing Committee of the Society shall begin the process of Due Diligence by calling a Special General Meeting for consultation among all the Members of the Society. All Members shall be requested to express their views, expectations & concerns regarding the Redevelopment during this Special General Meeting. These inputs from the Members shall be properly documented to bring out the common thread among them. This common thread would then determine the overall views, expectations & concerns of the Society Members from the Redevelopment process.
During this Special General Meeting, the Members can appoint a Redevelopment Committee to offer consultative inputs to the Managing Committee. Active Members who are ready to devote their time, efforts & expertise for the cause of Redevelopment shall be requested to join this Committee. The Members having Professional background in Legal, Architectural, Civil & Structural Engineering & Project Management shall add great value to the functioning of this Committee.
The first task after this Special General Meeting shall be to organize the documentation required to move ahead with the Redevelopment process. The Redevelopment Committee shall begin this documentation activity by scrutinizing the documents available with the Society records. There are typically 5 categories of documents required.
Land Revenue Records- These include the Property Card & City Survey Plan which can be obtained from the City Survey Office.
Municipal Records- These include the IOD, CC, Approved Building Plan & OC which may be available with Society Records or can be obtained from Building Proposal Authorities of the Municipal Corporation.
Society Records- These include the Flat Agreements of All the Society Members which may be available with Society Records or can be obtained from individual Members.
Legal Records- These include the Conveyance Deed which may be available with Society Records.
Structural Records- These included the recently completed Structural Audit Reports & the Structure Maintenance Report which may be available with Society Records.
At this point it is expected that the Society has obtained the Conveyance of its property. In case the Society has not got the Conveyance of its property, it would be necessary to begin that process first. The Society looking forward to Redevelopment would be about 30 to 40 years old & its Conveyance through Builder may not be possible at this stage. In this case it would be advisable to proceed with the Deemed Conveyance of the Society. The process of Deemed Conveyance is not the part of discussion of this article on “Due Diligence” but can be discussed separately, in case the readers desire so.
During the Redevelopment process the Members of the Society are required to take various decisions at every step. For the Members of the Society, their New Home is a matter of great emotive involvement which generally guides the decision making. However, majority of these decisions are related to Legal, Architectural, Civil & Structural Engineering & Project Management disciplines that require professional analysis.
For successful Redevelopment process, it is essential to ensure that the Members of the Society get appropriate advice from professionals from these disciplines. A sound professional advice removes the emotive element from the decision making thereby improving its efficacy. The Due Diligence offers an opportunity to Members of the Society to put in place the method of decision making that the Society would adopt.
While performing the Due Diligence, the Managing Committee & Redevelopment Committee can informally interact with various professionals. These informal interactions help them to understand the visions of the professionals about the real estate industry & more particularly about the Redevelopment potential of the Society. It further helps to understand the professional values practiced by the professional that have a great influence on the Redevelopment process.
The selection of professionals to guide the Society Members during the Successful Redevelopment process is a critical challenge. The Due Diligence offers the great opportunity to Society to interact with many professionals & then select the ones whose vision & professional values match the expectations of the Society Members. The Due Diligence helps the Society Members to constitute the right team of professionals typically referred to as the Project Management Consultants (PMC).
Depending on the size of the Society, the time required for Due Diligence would be about 3 to 6 Months. The value generated for the entire Redevelopment process by Due Diligence definitely outweighs the time spent on it. The Societies that perform Due Diligence as a preparatory step are able to draw great benefits out of it. The Due Diligence really culminates in to kick-starting a Successful Redevelopment Process.
Sanjay Geete