Why Do Some Residents Get Higher Rent During Redevelopment?

Redevelopment has become a familiar term in cities across India. Ageing buildings, safety concerns, rising repair costs and the promise of a modern lifestyle have pushed thousands of housing societies toward redevelopment. For many residents, redevelopment brings hope—bigger flats, better amenities, secure structures and increased property value. But along with excitement, redevelopment also brings confusion, disagreements and legal questions.

One of the most common disputes during redevelopment is the issue of rent for alternative accommodation.
Why does one member get higher rent?
Why do shop owners receive more compensation?
Why does the builder refuse to pay rent until the entire building is vacated?

These questions arise in almost every society undergoing redevelopment.

Why Do Some Residents Get Higher Rent During Redevelopment?

1. What Is Alternative Accommodation Rent in Redevelopment?

During redevelopment, the old building must be demolished, and construction of the new building can be carried out only after that. But residents cannot be left without a roof over their heads.

Therefore, the builder is legally responsible for giving:

  • Rent for alternative accommodation, or

  • A temporary flat provided by the builder, or

  • A combination of rent + shifting charges + compensation

This rent is provided from the date the member vacates the premises until the day they receive possession of the new flat.

For most families, this rent is crucial because:

  • They must shift to another home immediately

  • House rents in cities are extremely high

  • School and office locations limit their choices

  • Good-quality flats within their budget are very hard to find

In many cases, residents end up paying 1–2 months’ rent from their own pocket before receiving builder rent. This is because the notice period is short, and shifting + paperwork takes time.

2. Why Do Different Members Receive Different Rent?

This is the biggest source of confusion—and arguments—in redevelopment projects.

Many members naturally ask:

“Why am I getting less rent than another resident?
Why are shop owners getting the highest compensation?”

Let’s break down the legal and practical reasons.

Reason 1: Rent Directly Depends on Your Flat’s Area

Alternative accommodation rent is fixed based on square feet of your existing flat, not the number of members living inside.
This is always clearly written in the redevelopment agreement.

Example:

  • A 2 BHK owner with 850 sq. ft. carpet area will receive more rent

  • A 1 BHK owner with 450 sq. ft. will get a lower rent

This is not discrimination—it is purely area-based.

Reason 2: Shop Owners Get More Compensation Than Flat Owners

Shopkeepers always receive more compensation because:

  • Their business shuts down during redevelopment

  • They lose daily income

  • Their customers move elsewhere

  • Their livelihood is directly affected

  • Even temporary commercial spaces are far more expensive than residential ones

Therefore, legally and practically, commercial units receive higher monthly compensation.

This is not favoritism—it is a genuine economic difference.

Reason 3: Negotiation Skills and Market Rates Matter

Different projects, different areas, and different market conditions lead to different rent structures.

Rent amount depends on:

  • Local rental market rate

  • Builder’s financial capacity

  • Demand-supply of flats in the locality

  • Negotiations between society and builder

  • Consultation with project management consultants (PMCs)

Societies that negotiate strongly get better compensation packages.
Those that agree early often get lower rent.

3. Why Does the Builder Start Rent Only After FULL Possession?

This is another major issue residents face.

“Some members are ready to hand over their flats, but others are delaying. Why is my rent being held back?”

The legal and practical answer is simple:

A builder cannot start redevelopment until he receives 100% possession of the building.

Even if:

  • 51% consent is received,

  • 70% consent is received (as per redevelopment laws), or

  • 100% members have signed the agreement

Physical possession of the entire building is mandatory.

If even one member refuses to vacate, the builder cannot:

  • Demolish the building

  • Start construction

  • Move machinery

  • Take bank permissions

  • Begin any structural work

Therefore:

**✔️ Builders pay rent only AFTER complete possession

✔️ Not after partial or individual possession**

This rule protects the builder from financial loss and prevents disputes.

4. What If One or Two Members Create Obstacles?

Almost every society has at least one member who delays vacating due to personal issues, disagreements or negotiations.

But this delay causes:

  • Loss for all other members

  • Delay in starting rent

  • Delay in project completion

  • Increase in construction cost

  • Increase in rental burden on members

  • A rise in disputes among neighbours

Solutions Available to the Society

(A) Legal Remedies

  • The matter can be taken to the co-operative court

  • The society can complain under redevelopment laws

  • Authorities may penalize the obstructing members

(B) Mutual Settlement

Often, mutual discussion or a small adjustment resolves the issue peacefully and at lower cost.

Courts generally encourage societies to settle internally first.

5. Is It “Discrimination” if Someone Gets Higher Rent?

No, it is NOT discrimination.

There are valid and legally accepted reasons:

  1. Area-based rent slabs (bigger flat = higher rent)

  2. Commercial units receive higher compensation

  3. Market rate + negotiation differences

  4. Temporary business loss for shop owners

  5. Agreement terms signed by members

As long as:

  • The redevelopment agreement clearly states the rent distribution rules

  • Members signed the agreement voluntarily

  • Rent is calculated uniformly based on area

… there is no case of discrimination.

6. Why Do Members Often Pay the First 1–2 Months Rent Themselves?

This is a very common situation.

Even when the builder is legally responsible for rent, members may end up paying initially because:

  • Finding a flat takes time

  • Shifting takes time

  • Builders give short notices (30–40 days)

  • Good rental homes near schools/colleges are limited

  • The builder releases rent only after the site is 100% vacated

This is a practical urban limitation, not a legal failure.

7. What Should Members Do to Protect Their Rights?

Here are expert-recommended steps:

✔️ Step 1: Read the redevelopment agreement carefully

Especially the clauses on:

  • Rent

  • Maintenance

  • Shifting allowance

  • Timelines

  • Possession date

  • Penalties

✔️ Step 2: Verify rent calculations

Ensure the formula matches the carpet area.

✔️ Step 3: Keep all communication in writing

Notices, emails, and meeting minutes help in legal disputes.

✔️ Step 4: Raise issues through the society, not individually

Collective voice has more power.

✔️ Step 5: Avoid unnecessary delays in handing over possession

It harms everyone.

✔️ Step 6: Consult a redevelopment expert / PMC

They protect members from unfair terms.

8. What Should You Do in Your Specific Society’s Case?

Based on your situation:

  • You have 2–3 BHK owners and shop owners

  • All are receiving different rent amounts

  • Some members are ready to hand over, others have not found alternative homes yet

  • The builder has said rent will start only after complete possession

This is legally correct.

Because:

  • Rent varies based on area + commercial usage

  • Builder can pay rent only after full handover

  • Partial possession cannot trigger rent

  • Shop owners always get more compensation

  • Delays by one member affect everyone

  • Society and builder must handle obstacles legally or mutually

9. Key Takeaways for All Residents

1. Rent difference is normal and legally justified.

It depends on area and commercial nature.

2. Builders start rent only after getting full possession.

This is non-negotiable.

3. Shopkeepers get more because they lose business.

Their livelihood is affected.

4. One member’s delay affects all.

Legal or mutual settlement is necessary.

5. Redevelopment requires patience, cooperation and clear communication.

10. Final Expert Advice

Redevelopment is not just a construction project—it is a social project.
It requires unity, trust and timely decisions.

A few practical suggestions:

  • Start searching for rental flats early

  • Cooperate with society and builder

  • Avoid last-minute disagreements

  • Add penalty clauses in the agreement to prevent deliberate delays

  • Arrange joint meetings for clarity

  • Prioritize long-term benefits over temporary discomfort

With proper planning, redevelopment transforms old buildings into stronger, safer and more modern homes. The temporary inconvenience is small compared to the long-term gains.

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