In cooperative housing society redevelopment, one of the most critical steps is the execution of the Development Agreement (DA) with the selected developer. By-law 175 of the Model Bye-Laws for Cooperative Housing Societies, along with the Government Resolution (GR) dated July 4, 2019 issued under Section 79A of the Maharashtra Cooperative Societies (MCS) Act, lays down a clear procedure for redevelopment. These provisions empower the society to take action if the developer fails to execute the DA within the prescribed timeline.
Procedure for Redevelopment under By-law 175
By-law 175 outlines the step-by-step procedure for redevelopment of a cooperative housing society:
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The society must follow the redevelopment process strictly as per GR dated July 4, 2019.
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The developer is selected through a transparent process in the presence of an authorized officer of the registrar.
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Once selected, the society issues a Letter of Appointment to the developer.
Timeline for Execution of Development Agreement
As per the Section 79A guidelines, the developer is required to execute the Development Agreement within three months from the date of appointment. This is an essential step to legally formalize the redevelopment project, protect the rights of members, and define timelines and obligations.
Consequences of Non-Execution of DA
If the developer fails to execute the DA within the three-month period, By-law 175(b) empowers the society to take corrective action:
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The society can cancel the earlier resolution appointing the developer.
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A fresh resolution can be passed to appoint a new developer from the panel of approved developers.
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If no suitable developer is available from the panel, the society must restart the entire process afresh as per the GR dated July 4, 2019.
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The representative of the registrar must compulsorily attend the general body meeting where the new decision is taken.
Importance of Timely DA Execution
The Development Agreement is a legally binding document that safeguards the interests of society members. Delay in its execution can result in:
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Uncertainty over project timelines.
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Legal disputes between society and developer.
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Financial risks for members waiting for redevelopment benefits.
Hence, the provision to terminate a developer’s appointment and restart the process ensures that the project does not remain indefinitely stalled.
Key Takeaways for Housing Societies
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Societies must ensure that the developer executes the DA within three months of appointment.
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If no DA is executed, the society has the legal right to terminate the appointment and select another developer.
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All decisions must be taken in a properly convened general meeting with the registrar’s representative present.
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Transparency and compliance with the 2019 GR are essential to avoid future disputes.
Conclusion
By-law 175 gives cooperative housing societies the power to protect their redevelopment interests by terminating a developer’s appointment if the Development Agreement is not executed on time. This provision ensures accountability and prevents indefinite delays in redevelopment projects, helping societies move forward with a new developer if required.
