This guide is the pillar article for Development Agreements in Maharashtra cooperative housing society redevelopment. For the member-level agreement, see PAAA in Redevelopment: Meaning, Timing and Member Protection in Maharashtra. For the practical pre-vacating review, see the PAAA checklist for Mumbai housing society members.
First: understand the current legal position of the 2019 redevelopment directions
The Government of Maharashtra issued revised redevelopment directions on 4 July 2019 under Section 79A of the Maharashtra Co-operative Societies Act, 1960. Clause 18 specifically lists matters to be included when the society enters into an agreement with the selected developer or contractor.
Those directions remain an important framework for drafting and governance. But they should not be presented as if every deviation automatically invalidates a redevelopment. In Dudhsagar Co-operative Housing Society Ltd. v. Mukund Vaman Patankar & Others, decided on 24 August 2026, the Bombay High Court described the 4 July 2019 GR as providing standard guidelines and referred to earlier decisions holding that it is neither mandatory nor a concrete policy.
What the Development Agreement actually does
A redevelopment tender selects a commercial proposal. A General Body resolution authorises a decision. A Development Agreement converts those decisions into a legal package.
It should answer six core questions:
- What property and rights are being given?
The land, building, development rights, FSI/TDR potential, access and construction rights must be identified. - What does the developer owe?
Replacement premises, rent, corpus or other agreed consideration, approvals, construction, infrastructure, specifications and handover. - What protects the society if performance fails?
Bank guarantee, restrictions on transfer/mortgage, insurance, reporting, default remedies and termination rights. - What protects each member?
Carpet area, PAAA, transit arrangements, possession timing, plan/specification rights and payment obligations. - What approvals and regulatory rules apply?
Planning permissions, RERA where applicable, utility/NOC requirements and Occupation Certificate. - How does the project end?
Completion, OC, possession, common-area handover, defects, conveyance/records and final release of security.
Before drafting: freeze the commercial and technical deal
A Development Agreement should not be used to renegotiate a tender in private after developer selection. Before lawyers produce the final draft, the society should have a written schedule of the commercial and technical terms approved through its governance process.
That schedule should identify:
- developer entity and any parent/SPV relied on for financial strength;
- rehabilitation/replacement carpet area for each class of member;
- additional purchased area, if any, and its price;
- transit rent, deposit, escalation, brokerage and shifting payments;
- corpus or other monetary benefits;
- parking and amenity commitments;
- specifications and quality standards;
- project completion period and major milestones;
- bank guarantee/security package;
- sale component and financing assumptions;
- tender clarifications, final offer and negotiated changes approved by members.
1. Parties, title and the property schedule
The agreement should correctly identify the society, selected developer and any confirming or necessary parties. It should attach or clearly incorporate the property schedule, survey/CTS details, building details and title or lease position.
Before execution, the society's lawyer should reconcile:
- registered conveyance or deemed conveyance, where applicable;
- landowner/lessor or authority rights;
- existing mortgages, charges, litigation or encumbrances;
- access, easements, reservations and common facilities;
- member occupation/ownership records relevant to redevelopment;
- any adjoining plot, amalgamation or cluster-redevelopment component.
A DA should not grant broader rights than the society actually owns or is authorised to grant.
2. Scope of development rights
Define the rights granted to the developer with enough precision to prevent a later dispute over what the society surrendered.
Typical drafting questions include:
- Is the right exclusive, and for what period?
- Which plot and buildings are covered?
- Can existing and future FSI/FAR, TDR, fungible or incentive rights be used?
- Who pays premiums and acquisition costs?
- Can the developer amalgamate adjoining land or alter the scheme?
- Can the developer create a mortgage or security interest?
- Does the developer have rights over sale inventory only, or also over common areas?
- What happens to unutilised development potential after project completion?
The 2019 Maharashtra directions include a guideline that development rights given to the developer should be non-transferable. If the developer proposes an SPV, affiliate assignment, change of control or lender security, the Development Agreement should reconcile that structure with the society's approval and, where applicable, RERA Section 15.
3. Member entitlement and RERA carpet area
Clause 18 of the 2019 directions says the agreement should clearly state the carpet area payable under the Real Estate (Regulation and Development) Act, 2016. That is a critical drafting point because terms such as built-up, usable and saleable area can produce different numbers.
For each member category, the DA should specify:
- existing premises identification;
- free replacement RERA carpet area;
- basis for additional area, if any;
- floor/wing/flat allocation or the allocation process;
- parking entitlement;
- balcony/terrace treatment, if relevant;
- specification schedule;
- member-specific monetary benefits;
- what happens if the sanctioned plan requires a material change.
The DA should then require each member's individual PAAA to match the society-level entitlement framework. See the detailed PAAA guide.
4. Transit accommodation, rent and deposit
The 2019 directions state that during redevelopment the developer should, as far as possible, provide alternative accommodation in the same area until project completion, or arrange monthly rent and deposit acceptable to members, or provide transit accommodation.
The DA should go much further than that broad guideline.
| Transit term | What the DA should define |
|---|---|
| Monthly rent | Exact amount, member category and payment method |
| Start trigger | Possession handover date, vacating date or another objective event |
| Advance period | Whether rent is monthly, quarterly, 6/12 months in advance or another schedule |
| Deposit | Amount, due date, refundable/adjustable nature and beneficiary |
| Escalation | Percentage or fixed increase and anniversary date |
| Brokerage/shifting | Outgoing and return shifting, brokerage and storage if negotiated |
| Delay | Whether rent continues automatically through delays and until lawful possession |
| Default | Interest, cure period, security invocation and direct-payment mechanism |
The individual PAAA should not quietly reduce a benefit secured by the society's DA.
5. Bank guarantee and project security
The 2019 directions include a guideline that the developer should provide a bank guarantee equal to 20% of the total redevelopment project cost. Because the Bombay High Court treats the GR as standard/directory guidance, the real protection comes from the wording of the guarantee and the Development Agreement—not from writing “20% BG” in a resolution.
The DA should define:
- the project-cost base used to calculate the guarantee;
- issuing bank and acceptable credit quality;
- beneficiary and original-document custody;
- whether the guarantee is unconditional/on-demand or subject to proof;
- validity period and automatic renewal requirements;
- minimum notice before expiry;
- events permitting invocation;
- partial reduction or release tied to verified milestones;
- consequence if the developer does not renew on time;
- whether additional performance security, escrow or retention is required.
6. Completion period, milestones and extensions
The 2019 GR states a guideline that, depending on project size, completion from the relevant first/foundation commencement certificate should not exceed two years and, in exceptional circumstances, three years.
A DA should not stop at “36 months plus force majeure.” It should define:
- contract commencement date;
- approval milestones before demolition;
- foundation/plinth and superstructure milestones;
- MEP, facade and internal-finishing milestones;
- target dates for OC and possession;
- extension events and evidence required;
- notice requirements for delay;
- maximum extension or long-stop date;
- continued transit-rent and other member protections during delay;
- liquidated damages, interest or other negotiated consequences.
Regulatory extension of a RERA registration does not automatically rewrite the society's contractual remedies. The DA should say what happens contractually if the statutory registration date changes.
7. Registration of the DA and individual PAAA
The 2019 directions say both the society's Development Agreement and the individual member's Permanent Alternative Accommodation Agreement should be registered under the Registration Act, 1908.
Drafting should therefore make clear:
- who bears stamp duty and registration costs;
- who prepares and coordinates individual PAAA execution;
- the deadline for registration;
- how title/succession complications for individual members are handled;
- whether the developer can proceed with demolition if some individual registrations remain disputed;
- which DA schedules must be mirrored in each PAAA.
8. Define the exact pre-vacating conditions
The 2019 guidance states that members should vacate only after legal approvals for redevelopment are obtained and their individual PAAA is registered. The phrase “all legal approvals” can be too broad for a live multi-stage project, so the DA should convert it into a precise project-specific checklist.
For example, the agreement can identify:
- executed and registered DA;
- member PAAA registration;
- specific planning/sanction approvals required before vacating;
- demolition or commencement permission required for the relevant stage;
- RERA registration, where legally required;
- bank guarantee/security delivered and verified;
- transit-rent advance and deposit paid;
- insurance activated where required;
- vacating notice period and possession-handover procedure.
Members and the society should not have to debate these conditions after keys are requested.
9. RERA responsibilities where the project is registered
RERA can materially affect the developer's obligations, disclosures and project finance. Under Section 4, 70% of amounts realised from allottees for a registered real estate project are to be deposited in a separate scheduled-bank account and withdrawals are linked to percentage completion and professional certification. Section 11 requires continuing project updates, including approvals obtained and pending and project status.
The DA should allocate responsibility for:
- project registration and phase registration;
- promoter/co-promoter disclosures and updates;
- sanctioned-plan and approval uploads;
- quarterly project updates;
- separate-account compliance;
- advertising and sale-inventory compliance;
- extensions, corrections and complaints;
- sharing the registration record with the society and PMC.
If the project claims exemption under Section 3—for example, redevelopment with no marketing, advertising, sale or new allotment—the society should obtain a documented legal analysis rather than rely on a verbal statement. See RERA and Redevelopment Projects in India.
10. Plan changes and member consent
The DA should explain what the developer may change without returning to the society and what requires fresh approval. RERA Section 14 restricts changes to sanctioned plans and specifications in respect of an allottee's apartment without consent, subject to limited exceptions, and requires written consent of at least two-thirds of allottees for certain other alterations to sanctioned plans or common areas.
Contractually, require a change-control process:
- identify the proposed revision;
- state why it is required;
- show effect on rehab units, sale inventory and common areas;
- obtain architect/PMC review;
- obtain member/allottee consent where legally or contractually required;
- archive the superseded and revised plans;
- update each affected PAAA or entitlement schedule if necessary.
11. Developer finance, mortgage and lender rights
Redevelopment often depends on project finance. The DA should distinguish legitimate financing from security that could prejudice the society or members.
Review:
- what project assets and receivables may be charged;
- whether society land or rehabilitation premises can be mortgaged;
- lender notice/consent rights;
- non-disturbance protections for members;
- developer's obligation to obtain releases before possession or conveyance;
- what happens if the lender enforces security;
- whether the lender can nominate or replace the developer;
- priority between society rights, member rights and financing security.
RERA Section 11 also protects an allottee's interest against a later mortgage or charge created on an apartment after the promoter has executed an agreement for sale, but the society should not rely on that provision as the sole financing safeguard.
12. Assignment, change of control and transfer restrictions
The 2019 Maharashtra guidance says the development rights granted to the developer should be non-transferable. RERA Section 15, where applicable, separately provides that a promoter cannot transfer or assign majority rights and liabilities in a project to a third party without prior written consent of two-thirds of allottees, excluding the promoter, and prior written approval of the Authority.
The DA should cover not only formal assignment but also:
- sale of the developer/SPV;
- change in controlling shareholders;
- joint-development arrangements;
- business transfer or merger;
- lender enforcement;
- substitution of contractor versus substitution of promoter;
- use of affiliates for sale, construction or finance.
13. Specifications, quality and inspection
Attach the rehabilitation specification schedule rather than relying on a marketing brochure. The DA should define key materials, finishes, services and common facilities, while allowing controlled equivalents where products become unavailable.
Include:
- structural standards and design codes;
- flooring, windows, doors and waterproofing;
- electrical load and points;
- plumbing, sanitaryware and water systems;
- fire and life-safety systems;
- lifts and backup power;
- common-area finishes and accessibility;
- parking and EV provisions if promised;
- testing, inspection and PMC certification;
- snagging and defect-rectification procedure.
RERA Section 14 also imposes a five-year defect-remediation framework for specified defects in registered projects. The DA can add project-specific quality remedies without reducing statutory rights.
14. PMC reporting and member transparency
The DA should obligate the developer to provide the information the society and PMC need to monitor the project.
A practical monthly/quarterly reporting pack can include:
- construction progress against baseline programme;
- approvals obtained and pending;
- RERA update status;
- sale/construction finance information the developer is contractually required to disclose;
- transit-rent payment status;
- bank-guarantee validity;
- major procurement and contractor changes;
- variations/change orders;
- quality, safety and defect reports;
- next 60/90-day critical-path activities.
The 2019 directions also require redevelopment information such as notices, minutes and PMC reports to be made available to members through the society's website. A redevelopment record management system can keep the DA, approvals, member entitlements and progress evidence connected rather than scattered across email and messaging apps.
15. Events of default, cure periods and bank-guarantee invocation
A strong DA defines default before the relationship deteriorates. Do not rely only on a general clause saying “breach of any term permits termination.”
| Possible default | Contract response to define |
|---|---|
| Transit rent unpaid | Short cure period, interest, direct-payment mechanism, security consequences |
| Bank guarantee not renewed | Automatic default and right to invoke before expiry |
| Approval/registration lapse | Notice, remediation plan and prohibition on affected work/sales |
| Material construction delay | Recovery plan, enhanced reporting, damages and long-stop trigger |
| Abandonment / insolvency | Site and document control, security invocation, replacement rights |
| Unauthorised assignment | Injunction/termination consequences and restoration of rights |
| Material plan deviation | Stop/review/correction process and member-consent consequences |
16. Termination and developer replacement
Termination is difficult if the DA does not explain what happens the morning after termination.
Cover:
- objective termination events;
- notice and cure periods;
- emergency termination for insolvency, fraud or abandonment where negotiated;
- society right to enter/control the site;
- handover of plans, approvals, RERA credentials and consultant records;
- use or assignment of existing approvals;
- member rent during transition;
- bank guarantee invocation;
- treatment of contractor, purchaser and lender rights;
- inventory already sold to third-party allottees;
- appointment of replacement developer and cooperation obligation.
Where RERA applies, developer replacement may also engage the Authority's statutory process. Do not assume contractual termination alone transfers regulatory registration.
17. Power of Attorney: narrow it to the redevelopment purpose
Developers often require a Power of Attorney to submit plans, obtain approvals and execute project documents. The DA should identify the acts the attorney may perform and the acts that remain prohibited without society approval.
Review whether the POA permits:
- planning submissions and correspondence;
- execution of sale agreements for developer's permitted inventory;
- mortgage/finance documents;
- admission of claims or settlement of litigation;
- creation of easements or third-party rights;
- appointment of substitutes;
- acts after termination or expiry of the DA.
The POA should end or become unusable when the underlying development rights lawfully terminate, subject to legal advice on irrevocability and third-party rights.
18. Occupation Certificate, possession and final handover
The 2019 guidance links allocation of redeveloped flats to receipt of the Occupation Certificate and provides a mechanism for lottery where necessary. RERA also requires the promoter to obtain and make available the completion/occupancy certificate where applicable.
The DA should define possession as more than a letter saying “flat ready.” Conditions can include:
- Occupation Certificate for the relevant building/phase;
- completion of agreed specifications and essential services;
- snagging inspection and rectification process;
- lift, fire, utility and access functionality;
- release of relevant mortgage/security;
- member-specific handover pack;
- common-area and building management handover;
- final drawings, warranties, O&M manuals and approvals;
- treatment of remaining developer work and retention/security.
19. Registrar NOC: do not build the DA around an outdated assumption
The Maharashtra Cooperation Department issued a circular on 4 November 2025 directing Registrars not to issue a “No Objection” for redevelopment of cooperative housing society buildings.
For drafting purposes, that means a Registrar NOC should not be used as a generic substitute for lawful society resolutions, registered contracts, planning permissions or RERA compliance. The DA should identify the approvals actually required for the project and assign responsibility for obtaining each one.
20. Dispute resolution and jurisdiction
The 2019 directions refer to including a dispute-resolution provision under Section 91 of the Maharashtra Co-operative Societies Act in the relevant redevelopment agreement. But jurisdiction can depend on the parties, the nature of the dispute and the relief sought.
The DA should be reviewed by Maharashtra redevelopment counsel and clearly address:
- notice and escalation procedure;
- expert determination for technical disputes if desired;
- arbitration provisions where legally appropriate;
- Co-operative Court or civil-court jurisdiction issues;
- RERA Authority/Adjudicating Officer rights where applicable;
- urgent interim relief and injunctions;
- continued performance and rent obligations while a dispute is pending.
A generic arbitration clause copied from another redevelopment should not be assumed to resolve every jurisdictional question.
21. Approved plans and document access
The 2019 directions say municipal/competent-authority approved construction plans should be presented again to the General Body for information, and members requesting approved documents should be supplied copies on payment of an appropriate fee.
Convert this into a document-control clause. Require the developer to provide the society/PMC with:
- each sanctioned plan and revision;
- approval letters and conditions;
- RERA certificates and update records;
- commencement/phase permissions;
- OC/completion documents;
- technical certificates;
- insurance and guarantees;
- as-built drawings and warranties at handover.
What every member should be able to verify in the final DA
- The selected developer entity is the same one approved by the society, or any SPV structure is expressly approved and secured.
- The final commercial terms match the approved offer and tender clarifications.
- The replacement RERA carpet area is clear.
- Transit rent, deposit and escalation are objective and enforceable.
- The PAAA framework matches the DA.
- Bank-guarantee amount, validity and invocation are written in detail.
- Completion dates, extensions and delay consequences are measurable.
- Pre-vacating conditions are listed—not left as “all approvals”.
- Plan changes require the appropriate review and consent.
- Mortgage and lender rights cannot defeat member rehabilitation rights.
- Assignment/change-of-control restrictions are clear.
- Quality, specifications and defect correction are documented.
- Monthly/quarterly reporting is required.
- Default, termination and replacement-developer mechanics are workable.
- OC and lawful possession are defined.
- The society keeps full access to approvals, plans and project records.
Development Agreement red flags
- A one-page commercial offer is attached but the tender comparison and final negotiated terms are not.
- “Equivalent carpet area” appears without a number or RERA measurement basis.
- The bank guarantee is referred to but no validity, renewal or invocation mechanism is stated.
- Transit rent can stop on “offer of possession” even if OC or essential services are not in place.
- Developer can mortgage the entire property without clear rehabilitation protections.
- Developer can assign rights to any affiliate without society approval.
- Force majeure is drafted so broadly that ordinary financing or market difficulties excuse performance.
- The POA permits acts beyond redevelopment implementation.
- Termination is allowed but the society has no right to project plans, approvals or handover records.
- Members must vacate on a committee notice without objective contractual preconditions.
- The DA and individual PAAA use inconsistent carpet area, rent or possession terms.
- Material plan changes can be made without member/allottee consent required by law or contract.
Make the Development Agreement traceable to the project record
Rudh Systems can organise the registered DA, PAAA records, member entitlements, bank guarantee, transit-rent status, approvals, RERA references, PMC reports, milestones and amendments in one controlled redevelopment portal—so members can see what the agreement promised and whether the project is following it.
Frequently asked questions
What is a Development Agreement in society redevelopment?
It is the principal contract under which the cooperative housing society grants defined redevelopment rights to the selected developer and records the project's commercial, technical, legal, security, approval, completion and member-protection obligations. It is different from each member's individual Permanent Alternative Accommodation Agreement.
Is a Development Agreement the same as a PAAA?
No. The Development Agreement is the society-level contract with the developer. A PAAA is the member-specific agreement recording the permanent replacement accommodation and related individual benefits. Maharashtra's 2019 redevelopment directions contemplate registration of both.
Does Maharashtra require a 20% bank guarantee?
The 4 July 2019 redevelopment directions include a guideline that the developer should provide a bank guarantee equal to 20% of the total redevelopment project cost. The Bombay High Court has subsequently described the 2019 GR as standard or directory guidance rather than a rigid invalidation code, so the actual enforceable guarantee must be written clearly into the Development Agreement.
How long should a redevelopment project take under the 2019 Maharashtra guidance?
Clause 18 of the 2019 directions states a guideline that, depending on project size, completion from the relevant commencement/foundation certificate should not exceed two years and in exceptional circumstances should not exceed three years. A live project should still define its contractual completion date, permitted extensions and delay consequences precisely.
Should members vacate before the Development Agreement and PAAA are registered?
The 2019 directions state that the society's Development Agreement and individual PAAA should be registered and that members should vacate only after the legal approvals contemplated by the framework and registration of their PAAA. Because the GR is treated as directory guidance and projects differ, the Development Agreement should define the exact project-specific pre-vacating conditions.
Does a society need the Registrar's NOC before redevelopment?
A Maharashtra Cooperation Department circular dated 4 November 2025 directs Registrars not to issue a 'No Objection' for redevelopment of cooperative housing society buildings. A Registrar NOC should therefore not be treated as the substitute for the society's own lawful resolutions, contractual documentation or the approvals required from planning, RERA and other competent authorities.
What should the Development Agreement say about transit rent?
It should state the monthly amount, commencement trigger, payment frequency or advance period, deposit, escalation, brokerage or shifting benefits if agreed, payment method, default consequences and when the obligation ends. Member-level PAAA terms should reconcile with the society-level Development Agreement.
Can the developer transfer the redevelopment project to another company?
The 2019 Maharashtra guidance says development rights granted to the developer should be non-transferable. RERA Section 15 separately restricts transfer or assignment of majority project rights without prior written consent of two-thirds of allottees, excluding the promoter, and prior Authority approval where RERA applies. The Development Agreement should therefore state exactly what assignments, SPV changes, financing security and change-of-control events are permitted or prohibited.
What happens if the developer defaults or abandons the project?
The Development Agreement should define events of default, cure periods, continued transit-rent obligations, bank-guarantee invocation, access to project documents and approvals, termination procedure, possession of the site, appointment of a replacement developer and treatment of lender or third-party rights. RERA remedies may also apply where the project is registered.
Should approved plans be available to members?
Yes as a governance control. The 2019 redevelopment directions say approved construction plans should be presented again to the General Body for information and copies should be supplied to members who request them on payment of an appropriate fee. RERA also requires disclosure of sanctioned plans and project information to allottees where the Act applies.
Primary sources and further reading
- Government of Maharashtra — 4 July 2019 redevelopment directions under Section 79A, especially clause 18 on the Development Agreement.
- India Code — Real Estate (Regulation and Development) Act, 2016, including Sections 3, 4, 11, 14, 15, 17, 18 and 19.
- Dudhsagar Co-operative Housing Society Ltd. v. Mukund Vaman Patankar & Others, Bombay High Court, 24 August 2026 — current discussion of the 2019 GR as standard/directory guidance.
- Maharashtra Cooperation Department — 4 November 2025 circular directing Registrars not to issue redevelopment NOCs.
- Rudh Systems — PAAA in Redevelopment: Meaning, Timing and Member Protection in Maharashtra.
- Rudh Systems — RERA and Redevelopment Projects in India.