An existing flat owner can sell their flat even if the building is undergoing or proposed for redevelopment, but this ability depends heavily on the terms agreed in the redevelopment or joint development agreement (JDA), the society’s bylaws, and applicable legal restrictions. So, to answer your query: Can an existing flat owner sale a flat during redevelopment?
When a cooperative housing society or flat owners’ association enters a redevelopment agreement with a developer, the individual flat owners often surrender certain rights (such as the right of possession or development rights) under the agreement. However, unless the agreement explicitly prohibits further transfers, a member may sell their share, subject to the developer’s or society’s consent, or as allowed in the contract.
In practice, such a sale may function not as a standard flat sale but as a transfer of the owner’s redevelopment entitlement. The buyer steps into the seller’s position in the redevelopment contract and receives whatever compensation or new flat is due under the agreement.
The society or developer might require consent, documentation, or novation of the contract. In many cases, the sale is permissible so long as the buyer agrees to abide by the same terms and conditions that the original flat owner had accepted.
Tax and regulatory consequences also matter: when the owner gives up rights (for instance, development rights or the old flat) in return for a new flat or cash, the “transfer” is considered under Section 2(47) of the Income-Tax Act, and capital gains implications arise.
Moreover, courts and tax authorities have in some cases held that receiving a new flat in a redevelopment is an “extinguishment” rather than income, and thus may be treated differently in taxation.
I hope this helps!
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Can an Existing Flat Owner Sale a Flat During Redevelopment?
yug
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2025-09-26T08:43:07+00:00 2025-09-26T08:43:10+00:00Comment
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