Housing Society Redevelopment: Consent, Extra Carpet Area, Corpus and Rent
In a Mumbai society redevelopment, the developer is picked at a special general body meeting with a two-thirds quorum, by at least 51% of all members in writing, after a PMC-run tender with at least three bids. Each member then signs a permanent alternate accommodation agreement fixing the new carpet area, the corpus, the transit rent and the handover date. Guides put offers at 25% to 35% extra carpet.
Key takeaways
- The Section 79A directions set the process: quotations from at least five PMCs, at least three developer tenders, completion within two years (three in exceptional cases) and a bank guarantee for 20% of project cost.
- Maharashtra's new Chapter XI-B housing rules took effect on 30 June 2026 and keep the 51% approval and two-thirds quorum, with the Registrar's representative present.
- Corpus and transit rent are negotiated, not fixed by law. Guides quote Rs 5 lakh to Rs 20 lakh of corpus per flat.
- The Bombay High Court has held that a member's PAAA attracts nominal stamp duty; duty applies only to extra area you pay for.
- Tribunals have mostly treated corpus and hardship compensation as capital receipts, not income, with the corpus reducing your cost base.
How the process runs
The 51% consent rule, and the extra area that old non-cessed buildings earn under DCPR 33(7)(B), are summarised in our comparison of gated societies and standalone buildings. Here is the sequence the Section 79A directions and the 2026 rules expect.
- Requisition. A quarter of the members apply to the managing committee to consider redevelopment.
- PMC appointment. The society collects quotations from at least five architects or project management consultants and appoints one at a special general body meeting (SGM).
- Feasibility and tender. The PMC prepares a feasibility report and tender. At least three tenders are needed; if fewer arrive, the deadline is extended by a week, twice.
- Developer selection. At an SGM called on 14 clear days' notice, with a two-thirds quorum and the Registrar's representative present, shortlisted bidders present, and the developer needs written approval from at least 51% of total membership.
- Agreements. The society signs a registered development agreement, then each member signs a PAAA.
- Approvals, vacating and construction. Members move out once plans are approved; the directions allow two years to complete, three in exceptional cases.
If the SGM lacks a quorum, the proposal cannot come back for three months. The 2026 amendment rules, notified in June 2026, moved housing-society governance into a new Chapter XI-B and allow members to join general body meetings by video.
Which redevelopment scheme applies
The scheme under Mumbai's DCPR 2034 decides how much buildable area the developer gets, and so how generous the offer can be.
| Regulation | Covers | What it gives |
|---|---|---|
| 33(7) | Cessed buildings in the Island City, built before 30 September 1969 | Minimum 300 sq ft carpet per tenant; FSI of 3 or rehab plus 50% to 70% incentive, whichever is higher |
| 33(7)(B) | Non-cessed private society buildings over 30 years old | Extra 15% of existing built-up area or 10 sq m per tenement, whichever is more, within the FSI limit |
| 33(9) | Cluster redevelopment | Minimum plot of 4,000 sq m (city) or 6,000 sq m (suburbs) on an 18 m road; large incentive FSI |
| 33(20)(B) | Affordable and rehabilitation tenements handed to the BMC | Extra FSI for the developer; can lift what a society is offered |
Ask the PMC to show the offer under each scheme your plot qualifies for. A developer quoting only one may be keeping the better one to itself.
Carpet area, corpus and rent: what to negotiate
Every member is entitled to at least the existing carpet area. Everything above that comes from the deal. Published guides for 2026 give these ranges, and they don't always agree.
| Item | Ranges in published guides | What to fix in writing |
|---|---|---|
| Extra carpet area | Opening offers of 25%; targets of 35% or more | Carpet area as defined under RERA, per flat |
| Corpus | Rs 5 lakh to Rs 20 lakh per unit; one guide suggests at least 15% of flat value | Amount, payment date, and whether it is paid to the member or the society |
| Transit rent, 500 sq ft | Rs 25,000 to Rs 35,000 a month in Andheri West; Rs 50,000 to Rs 60,000 in Bandra | Rent paid in advance, with post-dated cheques or escrow |
| Rent escalation | 5% a year in one guide; 10% a year after 24 months in another | Rate and trigger date |
Some guides say the 2026 rules require quarterly advance rent linked to the ready reckoner and a transit home within 5 km. We could not confirm those terms against the rule text, so write them into your PAAA rather than rely on them.
Worked example: a 500 sq ft flat in Andheri West
- New carpet at 35% extra: 500 x 1.35 = 675 sq ft.
- Transit rent at Rs 30,000 a month for 24 months: Rs 7,20,000. Delay of 12 more months at 10% higher rent, Rs 33,000: Rs 3,96,000. Total over 36 months: Rs 11,16,000.
- If rent stayed flat at Rs 30,000 for all 36 months, you would receive Rs 10,80,000, so the escalation clause is worth Rs 36,000 in this delay.
The bigger protection against delay is the bank guarantee and a completion date with a rent penalty. The escalation is a cushion.
Paperwork and security for members
The development agreement is between the society and the developer. It transfers development rights and carries the main stamp duty. The PAAA is between you and the developer, naming your flat's floor, carpet area, amenities, corpus, rent and handover date. In 2023 the Bombay High Court held that PAAAs attract only nominal stamp duty, not more than Rs 100, where the development agreement has been stamped; duty is payable only on extra area a member actually buys. A member who doesn't sign the development agreement bears their own PAAA stamp duty and registration.
- Bank guarantee: the 79A directions require 20% of project cost.
- RERA registration: the project's sale component must be registered, with 70% of buyers' money in a designated account, and MahaRERA can act on complaints from members as well as buyers.
- Rehab first: insist the rehab wing is built before, or alongside, the sale wing.
Self-redevelopment
A society can act as its own developer, hire a contractor and keep the profit on the sale flats. The state's 13 September 2019 resolution offered an extra 10% FSI, a 50% concession on premium, interest-free premium instalments, an interest subsidy of up to 4%, stamp duty of Rs 1,000 in line with PMAY registration, and single-window approval within six months. The Mumbai District Central Co-operative Bank has been authorised to fund up to 95% of a project, and one reading of the 2026 rules lets such societies borrow up to 10 times their land's approved value.
It suits societies with a strong committee, time and financial skills. The society carries the construction, sales and cost-overrun risk that a developer would otherwise take.
Tax on the corpus, the rent and the new flat
Mumbai tribunal benches have repeatedly held that hardship compensation and corpus are capital receipts, not income. In Jitendra Kumar Soneja v. ITO, the ITAT held such compensation non-taxable but deducted it from the flat's cost of acquisition, which raises the gain when you eventually sell. Tribunals have also treated rent compensation from a builder as a capital receipt. The department has contested these, so keep the agreement and payment records.
The redeveloped flat has generally been treated as a continuation of the old one: the original cost and purchase date carry over, and the extra free area doesn't get a separate cost. Some rulings count the holding period from the development agreement instead. Either way, sell more than 24 months after you acquired the original flat and the gain is long-term. See our guide to capital gains on a property sale for rates and exemptions.
In our example, a flat bought for Rs 40 lakh with a Rs 15 lakh corpus would carry a cost of Rs 40 lakh minus Rs 15 lakh, or Rs 25 lakh, under the Soneja approach.
Where redevelopments go wrong
- Stalled projects. Rent stops, the old building is gone and the developer runs short of cash. The guarantee and escrow are your only real protection.
- Single-scheme offers. The developer uses the incentive FSI but shares little of it.
- Vague PAAAs. "Approximately 650 sq ft" or "specifications as per developer" invites disputes.
- Dissenting members. A minority can delay possession of the site through litigation.
Outside Maharashtra, what your flat owns underneath is set by its undivided share of land, which drives redevelopment compensation in cities without co-operative ownership. For Mumbai prices by area, see our Mumbai market study.
Frequently asked questions
How many members must agree to redevelopment in Mumbai?
For a co-operative society, the developer must be approved in writing by at least 51% of total membership at a special general body meeting with a two-thirds quorum and the Registrar's representative present. The 2026 housing-society rules kept that 51% threshold. A developer still needs every flat vacated, so dissenting members can delay the project through litigation.
How much corpus should a society ask for?
There is no statutory figure. Published 2026 guides quote Rs 5 lakh to Rs 20 lakh per flat, and one suggests at least 15% of the flat's market value. The right number depends on the extra FSI the developer gains. Ask the PMC for the project's sale revenue and profit estimate before judging the offer.
Is the corpus fund taxable?
Mumbai ITAT benches have mostly held that corpus and hardship compensation are capital receipts, not income. In the Soneja case the tribunal deducted the amount from the flat's cost of acquisition instead, so you pay more capital gains tax when you sell. Keep the development agreement and PAAA as evidence.
Do members pay stamp duty on the new flat?
Only nominally, on the area they are given free. The Bombay High Court held in 2023 that a member's PAAA attracts stamp duty of not more than Rs 100 when the development agreement has been duly stamped. If you buy extra area beyond your entitlement, you pay duty on that purchase.
What is the difference between redevelopment and self-redevelopment?
In redevelopment, a developer funds and builds the project in exchange for sale flats, and members receive new flats, corpus and rent. In self-redevelopment, the society acts as developer, borrows, hires a contractor and keeps the sale profit, with state incentives such as 10% extra FSI. It pays more but carries all the risk.
Weighing a redevelopment offer, or buying into a society that is about to redevelop? Talk to Realty Hunting and we can help you read the numbers.
