I own 2 apartments in chennai at the most important spot near tnagar. One is `3 year old, and other one is 21 year old.

Now i want to know abt my 21 year old apartment(100 flats). After may be 20 or 25 years, the lifetime of that flat may be gone...Just leave out the possiblities whether it survives for 40 or 50 years...

Tell me what will happen to the Flat owners of that apartment when its life time is over?

1. Can all the flat owners plan, and arrange money to build a new one...But that is highly impossible since we cant expect all owners to pay ransom

2. Will that land be sold to third party, and shared to all flat owners basis on square feet?. in that case...its a huge loss since all shares will be divided by 4 since we live a 3rd floor + gf basis

What are the possibilities to happen? What about renovation ?

I ask this question because if its gonna incur me losses, then i can sell it asap?
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  • Kindly help me out guys, Thanks
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  • Redevelopments have become common in Madras. Generally all the owners come together and develop a building sharing the costs.

    If you have a mix of small units and bigger ones it is very difficult as everyone might not agree.


    Will that land be sold to third party, and shared to all flat owners basis on square feet?. in that case...its a huge loss since all shares will be divided by 4 since we live a 3rd floor + gf basis


    Why will it be a loss? You would have got UDS (share of land) which would fetch you good value.

    If you did not get proper UDS (if it is a unapproved flat), you would not get anything, even in the case of redevelopment.
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  • Originally Posted by carthik4you
    I own 2 apartments in chennai at the most important spot near tnagar. One is `3 year old, and other one is 21 year old.

    Now i want to know abt my 21 year old apartment(100 flats). After may be 20 or 25 years, the lifetime of that flat may be gone...Just leave out the possiblities whether it survives for 40 or 50 years...

    Tell me what will happen to the Flat owners of that apartment when its life time is over?

    1. Can all the flat owners plan, and arrange money to build a new one...But that is highly impossible since we cant expect all owners to pay ransom

    2. Will that land be sold to third party, and shared to all flat owners basis on square feet?. in that case...its a huge loss since all shares will be divided by 4 since we live a 3rd floor + gf basis

    What are the possibilities to happen? What about renovation ?

    I ask this question because if its gonna incur me losses, then i can sell it asap?


    Demolishing and rebuilding is possible. There are construction companies that are specializing in this. If you happen to come down to KK Nagar, Anna Nagar area, you would notice that most of the old TNHB flats have been demolished and new flats have come up.

    The area that you would get will be based on UDS that you have. The apartment owners may or may not have to pay anything. If it is in good locality with wider road, additional floors could be built, meaning the built up area will be much more than what is today. This is the share that builder will take and sell and make money and also use for construction.

    Mind you that you will lose out on the UDS since more number of flats will come up in the same land under above scenario.

    The builder would also bear your rental expenses till the time they finish the construction. But again, this is true for TNHB flats where the UDS is more and roads are wider and builder will make more money.

    UDS will become the base for everything. Be it demolishing / reconstruction. In many cases, if there is no cash outflow, the flat owners will be fine with builders proposal to have a new flat with lesser UDS.

    Hope this helps.
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  • Thank you

    Dear Kaishu'

    Thanks for your detailed reply. I am sure this info will be very useful to many of us.

    regards
    unlikely
    be
    Originally Posted by Kaishu
    Demolishing and rebuilding is possible. There are construction companies that are specializing in this. If you happen to come down to KK Nagar, Anna Nagar area, you would notice that most of the old TNHB flats have been demolished and new flats have come up.

    The area that you would get will be based on UDS that you have. The apartment owners may or may not have to pay anything. If it is in good locality with wider road, additional floors could be built, meaning the built up area will be much more than what is today. This is the share that builder will take and sell and make money and also use for construction.

    Mind you that you will lose out on the UDS since more number of flats will come up in the same land under above scenario.

    The builder would also bear your rental expenses till the time they finish the construction. But again, this is true for TNHB flats where the UDS is more and roads are wider and builder will make more money.

    UDS will become the base for everything. Be it demolishing / reconstruction. In many cases, if there is no cash outflow, the flat owners will be fine with builders proposal to have a new flat with lesser UDS.

    Hope this helps.
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  • Thanks for the reply....in my case, I feel UDS is less and it may be better for me to go for a sale
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  • There is a worrying trend in Chennai.

    Some small to medium size builders are looking out of sale of old flats in Key areas in Chennai and buying one or two flats in those small old complexes.

    Once they buy one or two flats in the old complex they use it for storing things and stay put with the flats.

    The reason is they won't to block any redevelopment with third party builders.

    They will offer redevelopment plan to the other owners for low gains to other owners, if the other owners disagree, they will not allow any kind of redevelopment with third party developers.

    This forces the other owners to accept the poor deal offered by the flat owner (developer) or just do nothing.

    Many flat complex in T.Nagar and other key areas are stuck in that problem.
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  • Originally Posted by Economist
    There is a worrying trend in Chennai.

    Some small to medium size builders are looking out of sale of old flats in Key areas in Chennai and buying one or two flats in those small old complexes.

    Once they buy one or two flats in the old complex they use it for storing things and stay put with the flats.

    The reason is they won't to block any redevelopment with third party builders.

    They will offer redevelopment plan to the other owners for low gains to other owners, if the other owners disagree, they will not allow any kind of redevelopment with third party developers.

    This forces the other owners to accept the poor deal offered by the flat owner (developer) or just do nothing.

    Many flat complex in T.Nagar and other key areas are stuck in that problem.



    Greedy builders. Guess they may even don't sell one or two flats in their new projects so they still can do business on the same land after 30 years.

    Heck of these innovative ways of cheating.
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  • This forces the other owners to accept the poor deal offered by the flat owner (developer) or just do nothing.

    Many flat complex in T.Nagar and other key areas are stuck in that problem.


    Above is one manifestation of the key risk.

    Key risk is, one may not have a chance to realize the value of UDS or exercise control despite having the ownership. I know a few communities where the ownership of few apartments got tainted due to legal heir issues which is preventing the others to go ahead even though the consensus to redevelop is very much there and with everyone on board. This is an another variation of the issue where the intent is there, but past issues which they have no control over haunt them. In a 30 year life of the apartment, one can imagine these are bound to happen and in a community with 20-30 apartments, the odds are heavily in favor of 'some' issue cropping up - sheer probability.

    It is not with out reason that once the apartment approaches the age of 25 years, the apartment prices transact at discount to UDS-alone land valuation.
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  • I own an old Apartment in Adyar and we, the owners have entered into an agreement with a reputed builder for redevelopment on the following basic terms. But the whole process took about two and a half years (About nine months for shortlisting the builder and rest of the time for finalising the terms and conditions):

    1. The builder will get the plan sanctioned based on the prevailing norms.
    2. The structural design/detailing of the building in line with the seismic zone will be verified by a reputed agency. The same agency will take care of quality check for 2 years.
    2. The construction will be with Zero deviation. He has to take approval from the residents association before taking up the work and in 27 stages during construction
    3. Each owner will get a flat of area 62 sqft more than the existing flat in the same floor in the new building
    4. Since there is no reserved car parking in the existing building, payment for the same shall be made to the builder by the owners
    5. Additional expenses for 54 items incurred by the builder like lift, video security system, RWH etc has to be paid.
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  • This looks good arrangement. How do the builder gets paid, from the owners or he will get any additional flat to sell/ realise his cost plus margin?

    Is it a reputed builder? I guess small- medium builder as he has agreed for many conditions?
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  • The builder will get benefit from the flts from additional FSI.

    The builder's reputation is good. The main reason which helped us in the negotiation is that it is a prime area in adyar and the extent of land is close to 6 grounds.

    The major factor was , however, the unity among the owners of 32 existing flats ( about 26 families since few owned more than one flat) including those those who are settled elsewhere forong time.

    Social media was also put into extensive use and contribution from advocates/engineers/valuers among the owners also played an important role.
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  • Everyone who owns a flat that is over 25 years old should read Aravind Adiga's "Last man in the tower"
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  • With new land acquisition bill and with a strong/corrupt-free owners association (it work both ways for communities like HIRA where major stakes are held by the builder) you can redevelop the community with proper approvals and management.
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  • ^^

    Ramchi, Can you elaborate on this?

    What this bill state regarding re-development if flat complex and percentage of owner approval required for redevelopment (I.e. 70% etc)
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  • Land acquisition bill being worked up by the government though addressing different segment (Railways, Infra and defense related ones) the bill still be applicable for RE development, if my understanding is correct. With the consent of 75%-80% of the stakeholders (owners) the project can go ahead for development or redevelopment. This is my peripheral understanding of this subject. Obviously, this requires lots of clarification, how do you calculate the % of consent for a new project vs existing ownership (in a GC, for example).
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