Redevelopment agreements: what society members should read before signing

Redevelopment is the largest financial decision most housing societies will ever take, and it is usually taken by a committee of volunteers across a handful of meetings. Four numbers dominate the discussion; the clauses around them decide whether those numbers are worth anything.

The four numbers

• Carpet area offered to each member in the new building, stated in carpet terms.
• Corpus paid to members, and when each tranche falls due.
• Monthly rent and shifting allowance during construction, with an escalation formula.
• The completion timeline, and what happens the day it is missed.

The clauses that make them enforceable

1. A bank guarantee or security that survives until the occupancy certificate is issued.
2. Liquidated damages tied to the delay, payable without the society having to prove loss.
3. A clear default and termination trigger, with the consequence for part-built structures spelled out.
4. A restriction on assigning the development rights to a third party without society consent.

A generous offer with no security is a smaller offer than a modest one with a bank guarantee behind it.

Have the draft read before the general body votes, not after. Amendments are ordinary before signature and extraordinary afterwards.