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COVENANTS, INDEMNITY BONDS FOR SMOOTH REDEVELOPMENT

The covenants complete with indemnity bonds ensure that the developer performs his tasks as discussed. They must be clear and unambiguous in order to achieve the desired results, suggests Gajanan Khergamker

What are the covenants that a developer has to undertake before taking up a project?
- A senior citizen

There are a host of covenants that a developer has to undertake before taking up a project for redevelopment. The covenants complete with indemnity bonds ensure that the developer performs his tasks as discussed. The covenants should be clear and unambiguous in order to achieve the desired results. Here go a few riders to the covenants and indemnities needed:

Firstly, ‘The Developer shall carry out the redevelopment works in accordance with D.C. Regulations, BMC, MHADA act and all concerned authorities and the Society will not be responsible for any breach if any committed by the Developer.’ This covenant covers the Society from liabilities arising out of breach of law committed by the developer. Also, adding ‘…the Developer shall indemnity the Society / the members against objection, if any, raised by any of the concerned authorities,’ helps cover members’ interests even further.

The Society needs to clearly maintain that ‘The Developer shall carry out demolishing of existing structure and construction work at his own cost,’ also additionally that he, ‘shall bear and pay all the expenses for submission of the plans, amended building plans, getting the approval thereof, the cost of construction, Architect and Consultants Fees and other costs, charges and expenses,’ failing the second component, the Developer could well try to wriggle his way out of associated costs – them not being part of the covenants.

If at all there’s a demarcation of the property, it should read: The Developer has also agreed for Demarcation of the Building of the said Society and continues as the same Co-operative Housing Society in the said Property. ‘All the expenses pertaining to the Demarcation shall be borne by the Developer alone,’ should be added too, failing which other associated charges could be leveled on the Society.

In order to ensure that the Developer too is covered and the society indemnified against losses caused by his inaction, there should be a covenant expressing, ‘The Developer shall also obtain insurance of labour, workers and all others and indemnify and keep indemnified the Society from or against loss, damages due to inaction or otherwise on part of Developer from starting demolishing the existing building and till the members reoccupy their new flat in the newly-constructed building.’

To ensure that the Developer takes adequate precautionary measures failing which he alone will be held responsible, add covenant reading: The Developer hereby specifically agree that he shall take precaution for carrying out the work as a prudent contractor/ developer and shall take all precautionary, measures such as safety and security to their workmen as well as inmates of the said properties and the Developer shall be responsible for any acts of commission and/or omission of any person claiming through them. The Developer shall also insure the workmen and/or labourers and indemnify the Society and their members in that regard.

Finer issues too have to be covered through: The complete installation which the Developer is to undertake for his on-site power supply shall conform to the Indian Electricity Rules 1966 and Indian Electricity Act 1910 with latest amendments and specifications. The Developer shall provide at his own cost portable generators to maintain regular power supply for his operations in case of disruption of power supply due to sudden failure or any other unforeseen circumstances. You need to ensure here too, that you add, ‘The Developer shall indemnify the Society from any liability, either legal or financial, for damages or delay causes to the Developer on account of the failure of power supply.’

You need to ensure that the Developer provides prerequisite indemnity bonds for the project. Ensure that there’s an indemnity clause detailing, ‘The Developer shall be entitled to proceed with the development of the said property and construction/ reconstruction of the building/buildings as hereinabove provided and the Developer shall throughout the period of development keep indemnified the Society from and against all actions, suits, costs, charges, expenses, damages etc. resulting on account of any act of omission or any breach, delay or default on the part of the Developer in developing the said property or any Rules and Regulations, terms and conditions or otherwise.

And finally add, ‘The Developer shall not to make any claims on the basis of the present Development Agreement after the expiry of the 24 months, till the separate agreement is signed with the society.’

BE VIGIL ON ISSUE OF MOBILE TOWERS!
Apart from the health concerns directly affecting residents, mobile towers on one’s society terrace adversely affect the market value. More often than not, a handful of misinformed housing society members spurred on by unscrupulous managing committee members install cell towers on buildings without the required permissions from the said authority and mandatory consent of residents.
However, it’s here that RTI comes to good use. Sign up to attend a Legal Talk @DraftCraftTheMumbaiStudio and tackle the Mobile Tower menace.


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'Land Laws' is a fortnightly column by Solicitor Gajanan Khergamker. Any material provided here is in good faith and without prejudice. Only queries posed by attendees of chargeable Legal Talks @ DraftCraft The Mumbai Studio are answered here. For a paid legal opinion, intervention of Solicitor Gajanan Khergamker or to register for a Legal Talk, call 8080441593