Housing Society Problems & Solutions: Prerequisites for Redevelopment and Importance of PAA Agreement
Shirish Shanbhag 24 November 2023
Before a housing society can opt for redevelopment, there are a few conditions that should be met. For a building to undergo redevelopment in a city like Mumbai, it has to be at least 30 years old. Further, the building has to undergo a 'structural audit' from a government-certified structural engineer. 
 
The engineer's report will identify whether the existing building can be saved by doing structural repairs or demolishing it to build a new building. Based on such a structural audit, the managing committee can call for a general body meeting (GBM) to discuss the way forward and possibly appoint a developer for redevelopment. There are other prerequisites, such as the deemed conveyance must be completed before commencing redevelopment. 
 
Once a developer has been appointed for redevelopment, an agreement document between the builder and the residents becomes necessary. Such a developer agreement should explicitly specify the obligations and expectations of the builder and the society members to avoid problems in the future. A permanent alternate accommodation agreement (PAAA), which protects the rights and claims of the home-owner, should also be signed before vacating the flat and commencing redevelopment. 
 
While redevelopment is a long, tedious process that can eventually benefit residents, care should be taken to abide by all legal formalities to avoid disappointment and lengthy legal battles. This week, I shall explain some prerequisites of redevelopment and the importance of a PAAA agreement. We will also look at two cases of transferring a flat to a nominee or the deceased's family members. 
 
Prerequisites for Redevelopment of Old Society Building
 
Question: A few members of our building wasted time and interest in not letting redevelopment happen. Presently, our building is more than 35 years old and is in poor condition. I need professional guidance on how to proceed.
 
Answer: A building which is more than 30 years old has to conduct a structural audit once in three years as per bye-law No 76, of the Model Cooperative Housing Society bye-laws. 
 
In such a structural audit, a municipality-approved structural engineer will provide an attestation indicating whether your building is structurally weak, where demolition is required to redevelop it entirely, or whether remedial structural repairs can be done to strengthen it. If the structural engineer states in his report that redevelopment is necessary, the Society has no choice but to opt for redevelopment which cannot be stopped. 
 
Start by finding an excellent structural engineer and get the structural audit of your building done first. But still, remember that you cannot start redevelopment only based on a structural audit. The Society also has to get its deemed conveyance done, as it is one of the prerequisites for redevelopment. 
 
Importance of a Permanent Alternate Accommodation Agreement in Redevelopment
 
Question: Our housing society is under the MHADA layout in Sion, Mumbai. The Society had given redevelopment rights to a developer, and almost 90% of the work has been completed. So far, the developer has not provided any documents such as a PAAA, a development agreement. Hence, I wanted to understand what documents we need to  procure from developer and the Society to protect our claim and rights? 
 
Answer: It appears from your query that the Society had not done a PAAA of existing flats before redevelopment started. This will create many problems when redevelopment is eventually completed, and you get your apartment in the new building. 
 
A PAAA provides legal sanctity to the old flat owners that a newly built flat has been allotted in their name in the redeveloped building. Legally, it is only after the PAAA has been signed that homeowners should vacate their old building to commence redevelopment. However, it appears that this has not happened in your Society. 
 
In this regard, you should make a complaint against the managing committee of your Society to the deputy registrar of cooperative societies in MHADA building located at Bandra East.
 
NOTE
We will not be answering queries posted in the comments. Only questions sent through the Moneylife Foundation's Legal Helpline will be answered. If you want to seek guidance or ask questions to Mr Shanbhag, kindly send it through Moneylife Foundation's Free Legal Helpline. Here is the link: https://www.moneylife.in/lrc.html#ask-question
 
Transferring Flat of Deceased Owner to Family Members
 
Question: If a sole owner is deceased, what are the formalities of transferring the share certificate in the name of the family members? Please note the flat was in the name of the single deceased owner.
 
Answer: For simplicity, let us assume that the flat is in the name of the husband and he has a surviving wife and two children.
 
After the death of the husband, the sole owner, if his wife and his two children, all three together, want joint ownership of the flat, then they have to make a 'confirmation deed' on a Rs500 non-judicial stamp paper and register it with sub-registrar of assurances, stating that all three will be equal joint owners of the deceased person's flat.
 
Out of three, if anyone does not want joint ownership of the said flat, say that the mother does not want to be a joint owner, then she has to make a 'release deed' on Rs500 non-judicial stamp paper, releasing her right in favour of her two children, making them joint owners of their father's flat.
 
Becoming a Joint Owner, after Being Nominated By Owner of Flat
 
Question: I am a nominee in an apartment in a housing society in Mumbai and the owner is my aunt. She has two children. How can I add myself as a second joint owner in the flat while she is still alive? If she passes away, leaving me as a nominee, how would the apartment be transferred to my name?
 
Answer: If you want to jointly own your aunt's flat with her and during her lifetime, she would have to make a gift deed giving part (some percentage of her flat) to you.
 
One percentage of stamp duty, taken based on the ready reckoner market value of the flat, on the percentage of her share gifted to you, will have to be paid by your aunt.
 
After the death of your aunt, her two children and her husband (if alive) should do a release deed with you, on Rs500 non-judicial stamp paper, releasing their right on your aunt's flat in your favour.
 
Disclaimer: The guidance provided in these columns and on our Legal Helpline is on the sole basis of the facts provided by the reader/questioner and does not amount to formal legal advice in any form whatsoever. 
 
(Shirish Shanbhag has an MSc in Organic Chemistry, a Diploma in Higher Education, and a Diploma in French and has completed his LL.B. in first class in 2021. Before his retirement, he was a junior college teacher at Patkar College from July 1980 to May 2012, teaching theoretical and practical chemistry. Post-retirement in 2012, he started providing guidance and counselling to people on several issues, specifically focusing on cooperative housing society-related matters. He has over 30 years of hands-on experience in all matters about housing societies and can provide out-of-box solutions for any practical issue.)
 
Array
Free Helpline
Legal Credit
Feedback