Changing real estate: RERA orders have brought relief to homebuyers, DNA looks at the development

When the Maharashtra Real Estate Regulatory Act came into force on May 1, 2017, the mandatory rules introduced a sea of change in the real estate sector, giving prospective homeowners some solace. In the immediate aftermath of the Maharashtra Real Estate Regulatory Authority (MahaRERA) being set up, there was a lull in construction activity as developers rushed to get their projects registered.

MahaRERA, the principal authority for the real estate industry has, since its inception, taken on developers after receiving complaints against them, in a bid to clean up malpractices that were prevalent in the sector.

Dr Samantak Das, chief economist at Knight Frank India, an international property consultancy firm, said, “MahaRERA is an example that other states can follow. A mere visit to the website offers all information about a builder and details of his project that are required by a homebuyer. Information like what litigation a particular project is involved in is also in the public domain. For 70 years, developers have had an upper hand but after MahaRERA, from there being no information for a homebuyer, there are now many details available for his redressal.”

Developers too believe that RERA is a positive move for customers, and have been neutral in their approach. Rajesh Vardhan, managing director, Vardhman Group said, “MahaRERA has certainly had a positive impact for customers. It is a good thing to have happened to the industry. Issues, especially related to the delivery of projects, are coming to the forefront in the form of complaints and they are being redressed properly. The authority is neutral and is settling issues amicably wherever possible.”

Through some of its orders, the authority has taken on top developers on violations, some of its other orders have the potential to set precedents, and others have sparked intense debates in the sector.

Setting a precedent

Maharera ensures lodha developers returns money

On September 12, MahaRERA passed an order, in which it settled a case between a homebuyer and Lodha Developers. The complainant had booked a house in Lodha’s project Casa Ultima in Thane but later cancelled the deal. He alleged that after cancelling, the developer was not refunding his money, and hence, he approached MahaRERA. On the day of the hearing, Lodha Developers agreed to return the complainant’s money to him.

The complainant, Roshan Nawale, had complained that he booked a 2 BHK flat in Wing 28 of Casa Ultima and paid a booking amount of Rs 1.08 lakh to the developer. Thereafter, the complainant decided to cancel the booking and requested the developer to refund the amount. However, when he could not recover the said amount, he filed a complaint with MahaRERA.

The order read, “After the appearance, the respondent (developer), has shown willingness to pay back the booking amount and accordingly he has now paid it back. After receiving the booking amount, the complainant does not want to proceed further in this matter. Since the claim of the complainant is fully satisfied by the respondent, the complaint is disposed of.”

Usually in such cases, a homebuyer never recovers his money because most developers forfeit the initial booking amount. However, because of MahaRERA’s intervention, the homebuyer managed to get his money back.

Complete on time or pay up

Last week, the authority while hearing a complaint passed an order, in which it said that the developer will pay the complainant a monthly rent of Rs 15,000 if he fails to complete the building within the time assured. The case pertained to Pune, where the order passed reads, “The respondent (builder) Marvel Realtors and Developers will complete the building by March 31, 2018. Application for the occupancy certificate will be made at the same time as well. If the developer fails to complete the project in the time mentioned by him, he shall pay Rs 15,000 rent per month for 3BHK homes.” The authority also asked the developer to deposit a sum of Rs 1 crore in the housing society’s account at the time of conveyance.

Occupied buildings need not register, says maharera

MahaRERA passed an order last week in which it mentioned: “since a building is already occupied, it does not require to be registered with MahaRERA.” This one line led to a major debate in the industry because a plain reading of the order meant that thousands of building in Mumbai, which are occupied, need not register under the authority.

While hearing a complaint filed by Sejal Gandhi against developer Jayant Mehta, the complainant had alleged that the building Kamala Vihar Co-operative Housing Society, situated in Kandivli west, was not registered with MahaRERA despite not having received an occupancy certificate (OC).

After hearing both parties, the authority held that as the building is occupied, it need not register with MahaRERA. This led to a confusion as earlier it was presumed that only buildings with occupation certificates need not register. This, experts claim, will benefit around 19,000 buildings in Mumbai, which were occupied but did not have an OC.

Ramesh Prabhu, chairman of Maharashtra Societies Welfare Association, says that homebuyers have found some solace in MahaRERA, knowing they have an authority to go to. “Till now, the authority has been doing good as it’s a relief that homebuyers were looking for and have found it,” said Prabhu.

While there have been several cases in which orders have been finalised, in most cases, the authority has gone for amicable settlements.