Developing system to red-flag potentially stressed real estate projects: MahaRERA Chairman Ajoy Mehta

Maharashtra Real Estate Regulatory Authority (MahaRERA) Chairman Ajoy Mehta on September 30 said that MahaRERA is developing a system wherein it will red flag real estate projects that are on the verge of turning into stressed projects, enabling the authority to intervene and figure out ways to stop them from becoming lapsed.

Mehta was speaking at NAREDCO Maharashtra's 2022 property exhibition. He said that there are more than 4,000 lapsed real estate projects and that is worrying. "We want to handle them and have them moving."

"As a regulator, our first aim is to ensure that projects do not lapse. The first thing that we are doing now is that we are putting a system and checkpoint that will red-flag the projects before they turn into lapsed projects. This red-flag will go out to all stakeholders, including regulator, developer and eventually the home-buyer that will say that this particular project is going to run into trouble in so many days," he said.

"This system will be soon activated that will warn us that this project is not yet lapsed but it is getting stressed. So, we will send out the message and take corrective measures to ensure that the project does not become stressed. Secondly, if the projects lapse we have created a dedicated vertical that will look after lapsed projects," he said.

Recently, MahaRERA delivered an order wherein a developer was allowed to de-register a project, Mehta added. However, this does mean one can think that anyone can deregister a project and walk out because there are many caveats to de-registering it, he said.

MahaRERA has registered over 36,000 projects in the last five years’ worth Rs 8.69 lakh crore. Of these, around 10 percent or 4,500 project registrations have lapsed, whose worth is around Rs 78,000 crore.

When is a project declared as lapsed?

Every project that is registered by a developer is given three to four years for completion. Every project is issued a registration number. A search on the MahaRERA website using this number will throw up all details relating to the project. The registration number is to be published by the developer in every advertisement or promotion activity related to the project.

However, a project is termed as lapsed when the timeline given for completion is not met, and the developer has not applied for extension. For example, a project registered on May 10, 2017 with a completion deadline of May 10, 2021 is termed as lapsed from May 11, 2021, in case the developer has not applied for extension of the project.

Once the registration of the project is lapsed, the MahaRERA issues the list of such projects with a message below it stating, “The validity of MahaRERA registration for the following projects has expired. The promoter (developer) shall not advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any of these projects.”

Developers welcome move

Meanwhile, developers have welcomed the move by MahaRERA.