HOW TO SELECT A GOOD BUILDER FOR REDEVELOPMENT OF ANY HOUSING SOCIETY

One of the prime factors for successful completion of any Redevelopment Project is a selection of a good Builder. One of the things that cause the most stress when any Housing Society starts a redevelopment process, is finding a good and reliable Builder. Selecting a Builder, negotiating various terms and dealing with them and their team is one of the most stressful things is like organizing a wedding.

In Mumbai, increasing costs and short of space make it impossible for residents to move out of ageing and dilapidated Housing Societies and for them, the concept of redevelopment has become dream come true to have new and better houses to stay.

Thousands of older Housing Societies are showing signs of serious inattention with regard to repairs and upkeep. There are distinct safety and security issues and a complete absence of modern amenities. Under the circumstances, redevelopment is the only solution being a sensible and practical.

However, while many Builders sell the dream of redevelopment to Housing Societies, there have been several cases where the dream has turned into a nightmare for middle class families residing in these Societies. Even the reputed Builders have dodged in maintaining the terms of redevelopment projects.

Selecting an accountable and trustworthy Builder is a difficult task to ensure successful redevelopment. A redevelopment project going wrong can have disastrous consequences for all residents and it is invariably the Housing Society's Managing Committee that becomes the scapegoat.

In redevelopment, prevention is most definitely better than the cure. A failed redevelopment can be avoided by adhering to a proper process while selecting a Builder to partner with. Once the Builder is finalized, it is important to incorporate in the Development Agreement all the legal terms through an expert who is well versed with various laws of redevelopment that safeguard the corporate interest of the Society and its Members. This can eliminate the possibility of discrepant situation at a later date to a significant extent.

While selecting a Builder, both financial and quality aspects need to be considered. Most societies focus on only quantitative financial terms which include the carpet area offered to each society member, the corpus amount offered, rent for alternative accommodation, shifting charges and penalties. What ignored here are the qualitative aspects of the Builder which would include past experience and track record. Extensive research needs to be done on the Builder's construction, marketing and legal track record. Some of such alert areas that need to be pondered:

v Does the Builder have a strong brand?

v Is the habitable area of the redevelopment at par with the quality and brand of the Builder's saleable portion?

v Is the Builder known for violation of acts and rules laid down by authorities?

v What are the systems, structure and strategy of the Builder?

v Does he have strong in-house construction and marketing teams for execution?

v Does he have a record of cost and time overruns?

v What is his level of implementation expertise?

v How well-connected is he and how adept at obtaining necessary approvals from various authorities on time?

v Is he knowledgeable about and comfortable with the local environment? He may have to handle unforeseen hurdles that are always potentially a part of redevelopment projects.

v What are the Builder's abilities in terms of raising equity and debt funding?

v Does he use a transparent and consistent financial accounting policy?

v What is his current fund availability and funding pattern?

v Is he easily available to the Society in case of any emergency?

The Society should carry out analytical check of at least two or three other Societies where the Builder has constructed and delivered the similar projects. It is essential to establish whether he adheres to promises on quality and timelines as documented in the Development Agreement and provides sound infrastructure and finishes.

Given the complexities involved in the Mumbai real estate market, there is no single, standard solution in redevelopment. The process involved in a Builder search should be customized, flexible, transparent and in line with the redevelopment rules. The commercial offers from potential Builders should be driven by competition rather than price.

Here are certain important criterions to observe about a selection of a genuine Builder. Never ever select a Builder simply on the basis of his financial offers and exorbitant increase in carpet area and promises to provide amazing and astonishing amenities etc. His selection should be exclusively being based on his merit, reputation, technical capability, experience, financial status, quality of construction and successful completion of his earlier projects etc.

Visit their Website – Visit their website to know whether they have good reputation and who are their clients. Ask for those references and see if you can view work they have done previously that is similar to the project you are starting. This will give you the opportunity to speak to other clients and look at the quality and durability of the work.

Start dates – A reputed Builder will always be busy. You should be prepared to have to wait several weeks or even a few months before your Builder is able to commence the redevelopment process. When you ask them to quote for the same, talk to them about when they might be able to start. Someone who can start immediately may not be the Builder for you.

Builders who “cold call” – Good Builders are always in demand and always busy. They never turn up on your doorstep asking if they can undertake your redevelopment project. If a Builder knocks on your door and offers to do a job, turn them away.

Construction period – A redevelopment project may take couple of years or maximum three for completion, depending on the scale of property, after the work commences on the site. The Builder should ensure timely completion, physical possession, as committed to the Society. It shall be Builder’s responsibility to obtain Occupancy Certificate from the Municipal Authority. However, the Builder will have to pay the rent for the period until he delivers the new property after the Occupancy Certificate is received.

Experience – As within any profession, a Builder will have a certain amount of experience for their progression within the trade. This experience is what the well known and reputed Builder will draw upon when redevelopment project is undertaken and that is why it is important to hire an eminent Builder who has the type of experienced team you can rely upon.  

Knowledge – A professional Builder will always do their best to ensure that they have this level of knowledge throughout every part of their work and service. This means that not only will they have the necessary technical knowledge but they will also have knowledge of other professional local tradesmen working within the area, various permits required in the construction work being undertaken on your property and the specialized building regulations which will need to be adhered to at all times during the construction work. This in-depth knowledge possessed by the professional Builder will help guarantee that your construction work will be at the right time, using the right materials for the right price. Needless to say knowledge is invaluable. 

Safety – The knowledge which is possessed by a professional Builder is also a vital part of the customer having the peace of mind that the construction work has been undertaken with all safety measures at the forefront. This means that not only will the completed work on your property safely adhere to all the relevant building regulations but it will also ensure that it should add value to your home.

Quality of Construction –The Builders must ensure good quality materials and proper workmanship. Specifications as per Development Agreement should be adhered to and statutory specifications of the Local Planning Authority should be complied with. Proper technical supervision on site should be ensured through qualified and experienced technical personnel in addition to usual qualified structural engineers and architects. 

Defects Liability Clause – Builder should incorporate in Development Agreement, a clause for defect liability for a minimum period of 36 months or as per prevailing laws from the date of handing over of possession or intimation to the Society upon receiving the Occupancy Certificate from Municipality regarding the readiness to hand over possession, whichever is earlier and which shall be limited to the defects in the construction (i.e. structure) and not on the bought out materials most of which are covered under varied warranty periods by the manufacturers themselves.

However, in the event of recurring problem with the bought out materials, the member shall co-operate with the purchaser in sorting out the issue. This defect liability shall not cover force majeure situations such as damage resulting from war, flood, earthquakes etc.

Availability – A professional Builder will probably be busy with other jobs and you may have to wait for them to fit you in. If a Builder says they can start the next day, they may not be the professional Builder you are looking for.

Plans – A professional Builder adheres to the plans and ensures that no unauthorized construction is carried out which may subject the Society for distasteful and repulsive action from the Municipal Authorities at a later date. Builders who don’t want to work from plans should be regarded with suspicion – particularly as the planning department and building regulations officers will want to ensure that the building is going up exactly as approved.

Tender Document – Tender Document should contain extensive and genuine details on Financial, Technical and General Information of the Builder. Make sure to get the information on present or past litigation cases in any Court against the Builder by way of declaration.

To sum up this article, we once again stress that a good Builder is expected of lot of thoughtful process of redevelopment, knowledge, experience and expertise in design, planning, construction and executing the same with passion to deliver human friendly projects. The Builder selected, should be of unshakable reputation for quality, efficiency, trust, meticulous planning, top quality amenities, superlative designs, timely completion, guaranteed possessions and handing over of property of the Society for rehabilitation of its members.

Please educate yourself and caution your friendly neighbors to be vigilant from Irregularities and illegalities in Redevelopment by the Builders, Illegal gratifications showered by Builders on corrupt members of Managing Committees, Rampant Corruption in BMC, Flagrant violation of Rules and Regulations by the Builders, how to beware of Cheat and Fraud Builders and their criminal and felonious acts.

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