How to compare a builder's redevelopment offer: area, rent, PAAA and security

Rules as of 13 October 2026.

A builder's redevelopment offer usually arrives as one headline number: "35% more area". Court papers from Mumbai show that the number is only one line in a longer bundle: the carpet area as defined, rent and its end date, the PAAA, and security if the project stalls. Here is how the process and each term are laid out in the Government Resolutions and recent Bombay High Court judgments, so you can compare offers on the same basis.

The process comes first: feasibility, then bids

The State's redevelopment directions under Section 79A of the Maharashtra Co-operative Societies Act, 1960 (a GR of 3 January 2009, followed by a GR of 4 July 2019) set a sequence. The High Court, in Vina Arvindlal Siswawala v. State of Maharashtra (24 November 2018), summarised it as: a special general body meeting on the redevelopment policy, selecting an architect, inviting member suggestions, appointing a Project Management Consultant (PMC), a feasibility report, tenders, bids, bidder presentations, selecting the developer, and then the development agreement.

In Harish Arora (9 June 2025), the court noted the 2019 GR assigns the committee to seek PMC quotations (Clause 5), the Secretary to circulate minutes to all members (Clause 11) and to publish notices (Clause 16). These steps matter because the feasibility report gives the society its own numbers (permissible area, TDR, cost) before it reads any bid.

Are these steps compulsory? The High Court says no. In Maya Developers (2016) the 2009 directive was held "merely advisory"; in Harish Arora the 2019 GR was held "directory in nature". Courts still look for participation, notice and disclosure. Press reports say a new GR of 30 September 2026 requires at least three bids and a registered PAAA within three months of the development agreement. I could not read that GR, so treat those points as reported.

Read these six terms in every offer

1. Area, and how it is measured. In the Antariksh Realtors case (Bombay HC, 7 July 2026), every member was offered 1,080 sq ft, made up of 1,040 sq ft RERA carpet area and 40 sq ft of balcony. Ask for the number in RERA carpet area, not a vague "area".
2. The PAAA. The Permanent Alternate Accommodation Agreement fixes what you get back. In that case members approved the draft PAAA on 28 February 2026, and the court ordered that the developer must sign it with dissenting members before taking possession of their flats.
3. Allotment method. The same society approved a "floor continuity" method, where members get a flat on a floor matching their present one, by a majority of 43 members.
4. Rent or transit housing. The reported 30 September 2026 GR says the developer should give alternate accommodation, or approved monthly rent plus a deposit. Check how rent is revised, and what happens if the project runs late.
5. Timeline. The reported GR says completion within two to three years of the foundation (plinth) certificate. Ask what the agreement says and who pays if it slips.
6. Security. A bank guarantee is not compulsory. The High Court held, prima facie, that the guarantee requirement in the guidelines is recommendatory and that its absence cannot by itself invalidate redevelopment. In that case the developer instead reserved about 11,000 sq ft of carpet area plus one parking space per unit as security, with a clause letting the society sell those units on default. The court did not decide whether that was enough. Your society must decide it.

Worked example: two offers on one table (illustrative)

Take a society of 40 flats, each 500 sq ft RERA carpet. These figures are invented to show the arithmetic, not market rates.

	Offer A	Offer B
Extra area promised	35% (675 sq ft per flat)	30% (650 sq ft per flat)
Rent per month	₹40,000	₹45,000
Rent period promised	36 months	30 months
Rent over promised period	₹14.4 lakh	₹13.5 lakh
Corpus per member	₹15 lakh	₹10 lakh
Cash to a member (rent + corpus)	₹29.4 lakh	₹23.5 lakh
Total area returned to society	27,000 sq ft	26,000 sq ft

On paper, A wins on both area and cash. Now test delay: if A runs 12 months late and rent is not extended, a member pays ₹40,000 x 12 = ₹4.8 lakh from pocket. If B runs 6 months late with no extension, the cost is ₹45,000 x 6 = ₹2.7 lakh. Whether delay is covered is a drafting question, which is why the timeline and security clauses should be compared together with the headline area.

Checklist before you vote

• Get the feasibility report and PMC's comparison sheet in writing, not just the developer's presentation.
• Ask for the draft development agreement and PAAA before the general body meeting, not after.
• Ask who signs the PAAA, and whether it is registered, before you vacate.
• Read the penalty and default clauses. In the Antariksh agreement a clause carried an "18% penalty", and the judgment did not explain when it applies.
• Ask what security is offered and what the society can do with it on default.
• Keep copies of notices and minutes; the courts look at disclosure and participation.

Mistakes to avoid

• Comparing "35% more" with "30% more" without checking whether both use RERA carpet area.
• Assuming a missing bank guarantee makes the process illegal. Courts have not taken that view, but they have not endorsed any substitute either.
• Treating press reports on a new GR as final. Ask your registrar's office or advocate for the actual GR.

This is an explainer, not legal or financial advice. Have an advocate and a chartered accountant read the agreements.