Evaluation of a developer is most important stage before selecting one for Redevelopment. The Managing Committee and Redevelopment Committee should properly evaluate and place criteria for selection. The most important question in minds of residents and committee is what should be the criteria for selection.
We mention herewith some important criteria’s before you select a Builder / Developer for redevelopment;
It should be noted that preferably one should try to get offer from atleast 6 developers so that a correct evaluation is done and a fair estimate is made to understand the best developer for our society/plot.
We can divide the criteria into 2 parts;
A) Pre-qualification to determine eligibility
The criteria for pre-qualification to be considered are as under;
1) Past Performance which include projects completed and projects in hand
2) Certified Balance Sheet of last 3 years
3) Certified Profit and Loss Statement of last 3 years
4) PAN Number
5) Registration of the company / firm (Certificate of Incorporation)
6) Whether returns filed or not?
7) Man-power of company including list of Board of Directors and Top Management.
8) Any Tie-ups with Foreign firms
9) Annual Report, if any
10) ISO 9000 certificate (if any) and List of references.
11) Banker’s certificate for Solvency and Financial support.
12) VAT Registration & Sales Tax Registration no
13) Current ongoing litigations
14) Plant and Machinery available and proposed to be deployed
15) Names of Authorized signatories
B) Post receipt of offer, their financial proposal
Post receipt of offers from Developers, the following points should be taken into consideration to arrive at a decision for selecting a Developer;
1) Corpus fund offered
2) Basis of Saleable area
a) Ratio of Carpet to Saleable area (Shops)
b) Ratio of Carpet to Saleable area (Commercial)
c) Ratio of Carpet to Saleable area (Flats)
3) Comparison of amenities offered
4) List of Employees and Statement of Deployment of Senior Engineering Personnel and supporting technology & administration staff: Month-wise strength
5) Organogram of employees for the project (Who will report to whom)
6) Saleable rate assumed by Developer
7) Total number of flats vis-à-vis parking’s assumed (stilt, open, mechanical)
8) Whether the developer proposes to have a rehab building
9) Selling rate of stilt, open and mechanical parking proposed
10) Total construction cost assumed including the cost of infrastructure per sft of the construction area.
11) Cost of TDR assumed per sft and FSI consumption plan
12) Deposit, brokerage, rentals and one time relocation charges for temporary accommodation to be deposited in an escrow account
13) Total carpet area offered free of cost
14) Total fungible area offered at cost for new members
15) Provide free elevation area by way of dry balcony, niches, Indian seating, flower beds, duct areas, balconies, storages if any, etc.
16) Bar chart whereby project time lines are decided
17) Plan and schedule to apply for IOD
18) Procurement and materials plan
19) Housekeeping procedures to be followed
20) QA/QC/Safety procedures to be followed
21) Terms of Bank Guarantees
22) Terms of Power of Attorney
If the Managing Committee/ Owner of Plot are diligently following and evaluating the selection process, we assure that there will be no pit-falls.
Ameet Mehta is a leading Advocate who practices in High Court and other courts in Mumbai and owns Law firm M/s SOLICIS LEX. He has an Engineering background with multiple qualifications such as MBA finance, LLB and Mergers Acquisitions from London Business School