6. Steps for Development of Land by Developer
1. First Meet:
The Developer/Builder may directly or indirectly approach the Land Owner/Farmer or vice versa. This communication can occur through direct interaction between the parties involved or indirectly through authorized representatives or agents acting on their behalf.2. M.O.U. Document :
The initial meetings are conducted for negotiation, and upon reaching a mutual agreement, the terms and conditions are documented in a Memorandum of Understanding (M.O.U.). The M.O.U. encompasses crucial details, including:A. Property Details:
Comprehensive information about the property, including its boundaries and specific area to be allotted in favor of the landowner from the developer.
B. Deposit Amount:
Clear specifications about the deposit amount, whether it is refundable or non-refundable, to be made by the developer to the landowner.
C. Construction Timeframe:
The agreed-upon time period within which the construction of the project will be completed.
D. Public Notice:
The developer has the right to issue a public notice within [specific number of days] from the date of execution of the Memorandum of Understanding (M.O.U.) to confirm and verify the undisputed ownership of the land by the landowner. This notice also allows any concerned parties or claimants, if any, to come forward within the specified timeframe and present their objections or rights, if they exist, against the landowner's title to the property. The purpose of this public notice is to ensure transparency and resolve any potential disputes or conflicting claims before proceeding with the development project.
3. Time Span Utilization:
During the interim period of the Memorandum of Understanding (M.O.U.), the Developer gets a reasonable timeframe to procure and furnish all necessary revenue documents related to the property. These documents may include 7/12 extract, Mutation Entry (Pher Phar) 8 A extract, Zone Certificate, Search Report from Advocate and any other relevant documents.4. Search Report:
The stipulation for the developer's lawyer to conduct a thorough search of the property's title and prepare a comprehensive Search Report.5. Execution of Agreements:
The specific timeline within which the Development Agreement and Power of Attorney will be executed by the parties involved in it before the Sub Registrar in his office.6. Plan Design:
After the registration of Development & Power of Attorney Agreement, the developer engages an architect to design the project plan. The architect creates the blueprints and designs that outline the proposed development, considering relevant regulations and requirements.7. Application for Non-Agriculture Order:
The developer applies to the local authority to obtain a Non-Agriculture Order. This process is necessary if the land is currently classified as agricultural, but the developer intends to use it for non-agricultural purposes like real estate development.8. Application for Commencement Certificate:
Simultaneously or shortly after applying for the Non-Agriculture Order, the developer also applies for a Commencement Certificate from the local authority. This certificate grants official permission to start the construction of the project.Obtaining the Non-Agriculture Order and Commencement Certificate are critical steps to ensure that the development project complies with the applicable laws and regulations. It ensures that the land can be used for the intended purposes, and construction can begin legally.
9. R.E.R.A. :
After obtaining the Commencement Certificate, the developer is required to apply for RERA (Real Estate Regulatory Authority) registration.
The requirement for RERA registration varies, but in many regions, it is mandatory for real estate projects that meet certain criteria. Generally, residential projects with a certain size 500 sq. meters & above or a number of units 8 & above, fall under the purview of mandatory RERA registration.
RERA registration involves providing detailed information about the project, its layout plans, financial details, timeline for completion, and other essential information. This registration helps create transparency in the real estate market and ensures that developers adhere to specific guidelines and timelines for project completion.
10. Banking System :
Once the Developer obtains all necessary permissions from government authorities, they commence the construction of the project while simultaneously applying to a bank for approval of the project and or a Project Construction loan. Securing the bank's approval for the Approved Project Finance (APF) facilitates a smoother and more streamlined process for unit purchasers, as they can easily approach the same bank for their individual loan requirements related to the project. This arrangement simplifies the loan application process for buyers and fosters a convenient and efficient financing procedure for all parties involved.
11. Construction Work :
Upon obtaining the necessary approvals and permits, the developer may commence the construction work using their in-house workforce or choose to engage a team of contractors who specialize in providing construction services. The developer has the option to directly undertake the construction activities with their workforce or delegate the responsibility to reputable contractors with relevant expertise and experience in project development.The decision to use in-house resources or contract external construction services depends on various factors such as project scale, complexity, timeline, budget, and the developer's organizational capabilities. In both scenarios, the developer remains responsible for overseeing the construction process, ensuring adherence to quality standards, and complying with all legal and safety requirements.
12. Appointment of Marketing Team :
Upon reaching a significant stage in the development project, the developer may initiate the appointment of a marketing team or opt to establish an in-house marketing team. The purpose of this step is to effectively promote and market the upcoming real estate project to potential buyers and investors.
The appointment of a marketing team involves engaging external marketing agencies or professionals who specialize in real estate marketing. These agencies are well-versed in the industry's marketing strategies and have the expertise to create effective marketing campaigns, conduct market research, and implement various promotional activities to generate interest in the project.
On the other hand, establishing an in-house marketing team involves recruiting and assembling a dedicated team of marketing professionals within the developer's organization. This team focuses exclusively on promoting the developer's projects and works closely with other departments to align marketing efforts with the overall project goals.
The decision to choose between an external marketing team and an in-house team depends on various factors, including the project's scale, marketing budget, time constraints, and the developer's marketing capabilities. Regardless of the chosen approach, the marketing team plays a crucial role in creating awareness, generating leads, and ultimately ensuring the successful sale and branding of the real estate project.
13. Allotment of Units to Land Owner :
Upon receiving the plan approval from the Local Authority or during the construction phase of the project, the Developer and the landowner shall jointly and amicably decide and select the specific units that each party will possess, as per the terms agreed upon in the Development Agreement. To formalize this allocation and establish clarity regarding the ownership of their respective units, both parties shall execute a Supplementary Agreement amongst themselves. This Supplementary Agreement serves as a confirmation that the Developer and the Land Owner have mutually determined their individual units, thereby solidifying their future dealings with their respective allocated units.
14. Society Registration Process :
After selling and allotting its units to the individual unit holders, the Developer has the option to register the project as an Apartment or a Company or Society. However, in most cases, the practice commonly followed is to form a Society. In the Society Registration process, if the number of unit holders aligns with the requirements stipulated by the Society Act, then the project can be registered even during the construction phase.
The Developer collects expenses from the unit holders and deposits the remaining balance amount into the Society Account. During the final stages of the project's possession work, the Developer allows the unit holders to initiate the procedural part, enabling them to take control of the maintenance responsibilities. Until that time, the Developer undertakes the maintenance of the Project using the maintenance funds raised from the unit holders. This arrangement ensures that the Project is well-maintained and functional until the unit holders assume the responsibility upon completion of the possession work.
15. Completion of Project :
After completing the project and ensuring all features and fixtures comply with the local authorities' norms, the Developer must obtain the Completion Certificate. Only after obtaining the Completion Certificate can the Developer legally give possession of the respective units; failing to do so could lead to penalties for the Developer.
Upon handing over the possession of the units to the respective buyers, the Developer is obligated to transfer the balance amount for Society maintenance and provide all necessary documentation and working details to the Society.
Following the possession handover and settling the maintenance matters, the Developer initiates the process of Conveyance of Land in favor of the Society, ensuring the rightful transfer of land ownership to the Society's name. This step finalizes the legal recognition of the Society as the official owner of the land on which the project is constructed.
16. Conveyancing Part :
The transfer of Land Ownership in favor of the Society Name through the Land Owner as the Transferor and the Developer as the Consenting Party is a crucial step that the Developer should prioritize. However, in some instances, the Developer might avoid this stage due to financial constraints or time constraints, leading the Society and Unit holders to face the procedural burden.
17. Noting the Name on 7/12 Extract :
After the execution of the Conveyance Deed, the next step is to immediately proceed with the process of updating the 7/12 Extract to reflect the name of the Society as the new owner or occupant of the land and discarding the name of the Land Owner.
It ensures that the land is officially recognized as occupied and managed by the Society. By completing this step promptly, the public and concerned authorities will be informed that the Society has officially taken ownership & Possession of the land, ensuring transparency and legal recognition of the transfer of property rights.
