The trend of redevelopment of independent houses, especially in established localities in major urban centres, is quite common. In most arrangements, the builder gets the land free and the person who pledges the property for redevelopment is able to unlock the value of the property. This is typically done after retaining some share in the property. Here are three things to keep in mind in such arrangements.
Redevelopment timeline Get a very clear idea of the time taken to redevelop the property. Most importantly, if you don’t have a facility to stay during the redevelopment period, enter into an agreement with the developer so that some of that burden is shared.
Clarity of your share By giving your property for redevelopment, you are parting with a share of your property. The agreement that you enter with the developer should clearly mention your share in the property after redevelopment.
Plan for the extra unit Under such agreements, apart from a unit for yourself, you get an extra unit such as an apartment, as a part of the deal. Make a plan of what you want to do with the unit. You need to be very clear how you will manage the income emanating from the extra unit.
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