This Article is Published in “The Housing Times, February 25, 2018” issue.
The Feasibility Study is the first essential step in the exciting journey of Redevelopment of the Society. Through the Feasibility Study, the Members of the Society get the clear idea of what is possible under the Redevelopment activity. The clear understanding of Feasibility of the Redevelopment Process helps the Society Members to take more informed & timely decisions with respect to appointment of Builder.
The Feasibility Study for Redevelopment of Society broadly includes the following information.
A. Present Status
The Land Revenue Records & Municipal Records like Approved Building Plans & Occupation Certificate of the Society’s existing building is perused to ascertain the present status. The Area utilized by each Flat & Shop in the Society building is also considered as per these records. This data is used to record the total FSI Consumed by the Society’s Building & its distribution among the Members.
B. Redevelopment Potential
The prevailing Municipal Development plan indicates the FSI available on the Society’s Plot for the Redevelopment process. The Municipal DP remarks are obtained. Other remarks are also sought from various Government departments. The reservations/ setbacks applicable on the Society’s Plot and the availability of TDR and/ or any other benefits are considered. This data is used to ascertain the Total Permissible Redevelopment Potential available to the Society.
C. Cost of Redevelopment
The Cost of Redevelopment typically includes the following Costs
- Municipal Development Charges & Premiums
- Cost Of TDR
- Cost of Construction
- Cost of Temporary Alternate Accommodation of Society Members during the Construction
- Cost of Corpus Fund to Society Members
- Cost of Modern Building Facilities like Solar Electric & Heating Systems, Water Harvesting & Treatment Systems, Waste Management Systems & Charging Ports for Electric Vehicles
- Costs for Professionals- Architect, Structural Engineer & PMC
D. Potential Revenue of Redevelopment
The status of the Real Estate Industry & the Share Market greatly influences the Potential Revenue of the Redevelopment. The Location of the Society & availability of major landmarks (like Schools, Colleges, Hospitals, Markets, Malls & Cinema Halls etc.) in its vicinity influence this Revenue. The availability of Modern Building Facilities also influences this Revenue positively. The Prices of Flats & Shops in the vicinity of the Society are obtained from the records of Sales effected during the previous years. This data is used to predict the tentative Price of Flats & Shops in the Society building thereby determining the Potential Revenue of Redevelopment.
E. Distribution of Redevelopment Potential
The Society & the Builder are equal Partners in the Redevelopment Process. The Redevelopment Potential is to be distributed among the Society & the Builder. The above information (A to D) is used to ascertain the Distribution of the Redevelopment Potential among the Society & the Builder. The just Distribution of the Redevelopment Potential resulting in a Win – Win situation for both the Society & the Builder yields positive outcome. Any attempt by either the Society or the builder to snatch more Profits at the cost of the other would result in Win – Lose situation thereby making the Redevelopment Process unviable.
F. Benefits to Society Members
The Benefits to Society Members is the most sought-after information available in the Feasibility. Based on the Distribution of the Redevelopment Potential the assessment for the Benefits to the Society Members is made. The major Benefits to the Society Members are listed as follows.
- Additional FSI
- Corpus Fund
- Deposit/ Rent for Temporary Alternate Accommodation
G. Self-Development Potential
Self-Development is an option available where the Society need not proceed with the appointment of Builder for its Redevelopment. In this option the Society may choose to be the Builder on its own. In such a case, the Society may reap the rich rewards of Profits that would have been earned by the Builder. The Feasibility Study may also include a note about the Self-Development Potential so that the Society Members can deliberate on this option of Redevelopment.
H. Annexures
The Feasibility Study may include the following annexures to add clarity to is findings & recommendations.
- Land Revenue Records
- Existing Building Records (IOD, CC, Approved Plans, OC & BCC)
- DP Remarks
- Remarks from other relevant Government Departments
- Tentative Redevelopment Building Plan
- List of Recommended Amenities
- List of Modern Building Facilities
With all the above information included, the Feasibility Study becomes the most important & reliable document available to Society Members. It acts as the Lighthouse that guides the Society Members during the Process of Redevelopment. The comprehensive information included in the Feasibility Study helps Society Members to better understand the Proposals by the various Builders. The Builder’s Proposals deviating greatly from the recommendations of the Feasibility Study may be considered unrealistic.
The Feasibility Study is to be presented during the Special General Meeting of the Society. The PMC & Managing Committee Members are expected to explain the various findings & observations of Feasibility Study. The Society Members are expected to approve the Feasibility Study after deliberating on its influence on the Redevelopment Process. After the Approval of the Feasibility Study during the Society Special General Meeting, the next step of Redevelopment is Project Tendering.
Sanjay Geete