Short Answer

During redevelopment, the builder (developer) is legally required to provide either transit accommodation (temporary housing) or monthly rent compensation to all existing members who must vacate their flats.

As per Gujarat RERA Act, 2016 (Section 11 & 18) and Model Redevelopment Guidelines issued by the Gujarat Government, every redevelopment agreement must clearly specify:

The amount of rent or alternate housing to be provided during construction, and

The timeframe within which members will receive possession of their new flats.

Detailed Explanation

When a cooperative housing society in Gujarat undergoes redevelopment, members are required to vacate their premises to allow demolition and reconstruction.

During this period, it is the builder’s legal and contractual duty to ensure that no member is displaced without proper compensation or alternate accommodation.

The Gujarat RERA (Real Estate Regulatory Authority) and the Gujarat Cooperative Societies Act both mandate fair and transparent compensation terms in redevelopment projects to safeguard residents’ interests.

• Legal Framework:

(a) Gujarat RERA Act, 2016 – Section 11 (Promoter’s Obligations):

The promoter (builder) must fulfill all terms of the redevelopment agreement, including payment of rent, maintenance of temporary housing, and timely possession.

(b) Section 18 – Right to Compensation for Delay:

If the builder fails to hand over possession within the promised time, the affected members are entitled to:

Monthly rent reimbursement until possession, and

Interest or compensation for the period of delay.

(c) Gujarat Government Model Redevelopment Guidelines (Urban Development & Housing Department):

The guidelines specify that every redevelopment proposal must include:

Rent compensation or transit accommodation details,

Shifting allowance for relocation,

Assurance of possession within a fixed period (generally 24–36 months), and

Bank guarantee or escrow arrangement to protect members’ rights in case of default.

• Typical Compensation Structure in Redevelopment:

Type of Compensation Details / Common Practice in Gujarat

Transit Accommodation Builder provides alternate flats (rented by the builder) for members to stay during construction.

Monthly Rent ₹15,000–₹30,000 per month (depending on city and flat size) paid directly to members until possession.

Shifting Charges ₹25,000–₹50,000 one-time payment for relocation.

Lock-in Period Clause Rent continues monthly until new flats are ready, even if construction is delayed.

Additional Rent for Delay 15–18% interest per annum or double rent if project completion exceeds the agreed period.

These rates can vary depending on city (Ahmedabad, Surat, Vadodara), project type, and redevelopment agreement terms.

• Step-by-Step Process for Ensuring Compensation:

Draft a Redevelopment Agreement:

The society’s appointed legal advisor should ensure that rent, alternate accommodation, and timelines are clearly mentioned.

General Body Approval:

Members must pass the redevelopment proposal by two-thirds majority (as per Section 154(3) of the Gujarat Cooperative Societies Act).

Register the Agreement:

The builder–society agreement must be registered with the Sub-Registrar’s office and uploaded to GujRERA.

Disbursement:

Rent is paid monthly (through cheque or bank transfer) or alternate accommodation is provided before demolition begins.

Enforcement:

If the builder defaults, members can file a complaint with GujRERA or the Registrar of Cooperative Societies for enforcement.

• Remedies if Builder Fails to Pay Rent or Provide Housing:

File a RERA Complaint under Section 18 for non-compliance.

Approach the Registrar of Cooperative Societies for breach of redevelopment terms.

File a Consumer Court case for deficiency in service.

In severe cases, members can terminate the agreement and appoint a new developer.

• Real-world Scenarios

Scenario 1: In Ahmedabad, a society undergoing redevelopment received ₹20,000 per month per flat for 30 months. When the builder delayed possession by six months, RERA ordered additional ₹1.2 lakh per member as compensation.

Scenario 2: A Surat developer provided alternate rental flats for all 40 members during redevelopment. The society ensured a bank guarantee to cover rent for the entire duration.

Scenario 3: In Vadodara, a builder stopped rent payments midway. Members filed a GujRERA complaint, and the authority directed the builder to resume rent payments with interest.

References

Gujarat RERA Act, 2016 – Section 11 & 18: Official PDF

Model Redevelopment Guidelines – Urban Development & Housing Department, Govt. of Gujarat (2020)

Section 154(3) – Gujarat Cooperative Societies Act, 1961: Official PDF