Mumbai has come a long way since the first redevelopment project started in 1992. Over the years, a number of societies have upgraded to a better lifestyle and gained extra living space in the bargain. However, with ever-increasing government premiums and input costs, the margins left for a developer have largely declined.
This has led to many developers and societies becoming more apprehensive about opting for redevelopment. An innovative method has emerged to solve this problem: DM (Development Manager) Led Self Redevelopment.
Here, the developer takes on the role of a development manager that oversees the self-redevelopment project to ensure that things move smoothly. The developer is given a fixed fee for the entire work of redevelopment, while the society dons the hat of a promoter. This leaves the responsibility, along with the benefits, in the society’s lap. The developer benefits from the deal by not having to take any financial obligation and yet gets a fee for the work to be done. This gives the society the security of an experienced professional to take care of the redevelopment process. Since the developer does not have any financial obligation, they can take on many such projects simultaneously.
At their core,self redevelopment or DM led projects are about placing power and control over decisions in the hands of the society. In traditional developer-led redevelopment, once the developer takes over, the society members get little to no say in how the project is managed. Thus, the DM Led Redevelopment model was created to strike a balance between utilizing the skills of developers whilst keeping the decision-making strength with the society.
So what are the other advantages of this model?
- Benefits stay with the society members
The benefits of redevelopment that the developer would usually take advantage of are shared by the society members. Involving a DM doesn’t take away from those benefits.
- Decision-making power
Even though DM-led self-redevelopment includes the guidance of a developer, the final decisions are still taken by the society members. This includes decisions on who gets hired to work on the project, as well as decisions on how to utilize FSI and funds. However, it is very tricky, and one must use this power with caution. It is wiser to follow the judgements of the experienced developer rather than struggling to learn to develop at the cost of one’s own home. The idea is to have a say in the planning, to be vigilant, ensure the smooth execution of the project, and exercise the power of decision-making only when the objects of the development, as defined during the planning stage, are being compromised.
- Interest rates
The government provides subsidies on interest rates to those opting for self-redevelopment. Under this model, the DM may help you secure the necessary loans. However, since you’re going for self-redevelopment, the interest rates will be lower. There are also various models that can be structured to help you get loans at lower rates.
- Better transparency
A struggle often seen with self-redevelopment is a lack of communication between contractors and the society during the construction process. The society members are often unaware of how the project is moving because they don’t know how to navigate the technical aspects of the process. Having a DM helps close the knowledge gap and you can get more transparency between everyone involved while the project management consultant monitors the entire process.
- Timely completion
Your DM’s role will also be to make sure things are happening on time. Their knowledge as developers can help them move things along efficiently so that you receive your new homes as scheduled.
DM-led self-redevelopment has combined the advantages of developer-led and self-redevelopment to create a game-changing model that makes things easier for everyone involved. It takes away the stress of complicated decision-making and construction management from society members. Developers get to step in and use their knowledge as professionals without financial skin-in-the-game.
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