The Maharashtra Real Estate Regulatory Authority (MahaRERA) was set up in May 2017. It was the first real-estate regulatory authority in India, after the Real Estate Regulatory Act, 2016, was passed in Parliament.
The top five
1: On December 27, the authority allowed developers to apply for the extension of project registrations without the consent of 51 percent of homebuyers.
The MahaRERA ruled that developers will, however, be required to state the reasons why registrations should be extended without such consent. It further asked developers to declare their interests in multiple real-estate projects during registration, a step that would help homebuyers to take an informed decision.
Impact: It can revive several stuck or lapsed projects. This move will help developers to carry out further work on projects whose registrations have been cancelled. Once registration lapses, developers are not able to sell or market their inventory. In a way, this affects the cash flow and halts construction. The move will help thousands of homebuyers to get possession of their dream homes. However, experts have warned that the order can be challenged in a court of law, since it has several grey areas.
2: The MahaRERA, in a set of two orders in November 2022, suspended the registration of around 60 real-estate projects in the Kalyan-Dombivli Municipal Corporation (KDMC) area near Mumbai. The authority found that these developers had submitted fake commencement certificate (CC) documents to obtain RERA registration.
Impact: Homebuyers will now do better due diligence before making a decision. This move has also resulted in MahaRERA making its checks stricter by tying up with multiple authorities, so that something like this is not repeated.
3. The MahaRERA, in September 2022, directed a Mumbai-based developer to deduct only 2 percent as cancellation charges, instead of 10 percent as demanded by the developer. The authority termed the demand unreasonable and also said it has issued an order regarding the same in August 2022.
Impact: The MahaRERA has handled hundreds of complaints relating to the deduction of 10 or 20 percent of booking money as cancellation charges by developers. In August 2022, the MahaRERA made it clear that not more than 2 percent should be deducted.
4: In an August 2022 order, the authority allowed a developer based in Mumbai to de-register a residential project in south Mumbai, ruling that there is no provision in the RERA Act to enforce the completion of a project when the developer is not interested or unable to do so.
The developer, Turf Estate Joint Venture LLP of DB Turf View, which was developing a 93-storey tower in south Mumbai, had refunded homebuyers with interest to two-thirds of the buyers. However, five buyers refused to accept the refund and challenged the same in court. The MahaRERA has said the RERA Act is silent on deregistration at the request of a developer, but it has to take the decision based on the intent of the law.
Impact: This is expected to formalise the process of developers wanting to exit from a project in doing so, but after refunding homebuyers. Otherwise, developers used to allow project registration to lapse. Experts, however, suggest that the MahaRERA should decide this on a case-to-case basis rather than approving every deregistration application. This will ensure that there is no attempt by developers to change the nature of the project by misinterpreting rules and regulations.
5: In June 2022, the MahaRERA announced the creation of a dedicated vertical to look over lapsed projects. In the state, there are more than 4,500 lapsed projects, worth over Rs 78,000 crore. Of these, 60 percent of the projects are from the Mumbai Metropolitan Region, according to MahaRERA. The purpose behind the creation of a separate vertical was to ensure that projects that are stuck due to multiple reasons like litigation, financial distress etc., can be resolved by the dedicated vertical through a mediation between homebuyers and developers.
Impact: From October 2022, the MahaRERA has started issuing notices to developers over lapsed projects. The authority said its priority was to investigate 300 lapsed projects in which they suspect financial wrongdoings. The dedicated vertical ensures a separate forum for homebuyers and developers to present their case, rather than going via the channel of filing a formal complaint and fighting the battle legally.
Overview of the top five orders
Avantika Kadapatti, a Mumbai-based real estate and litigation lawyer, said: “In 2022, we have seen landmark MahaRERA orders displaying how the authority's long arm of justice has evolved, keeping in mind the changing business operations and homebuyer sentiments.”
“From categorising equity investors as 'promoters' and holding them responsible for promoter obligations to now allowing builders to apply for extensions for project registrations, without the previously mandated consent of 51 percent of project allottees, it is a great move. It's encouraging to note how they have developed a vertical dedicated to stalled or lapsed projects and it will be an interesting mechanism to observe and learn from," she said.