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RERA setting a bad example by going soft on builders: Housing experts

Friday, MahaRERA decided the new fine for developers who applied after the period August 16 to August 31, to be Rs 1 lakh or an amount equivalent to the registration fee of the said project, whichever is more.

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Housing experts in Mumbai feel that Maharashtra Real Estate Regulatory Authority (MahaRERA) is going soft on builders, especially in terms of levying fines on developers for late registration. Their basic apprehension is that the law allows developers to be fined up to 10 per cent of the total project cost, while RERA is charging the highest fine of Rs 10 lakh and lowest of Rs 2 lakh from developers for late registration.

On Friday, MahaRERA decided the new fine for developers who applied after the period August 16 to August 31, to be Rs 1 lakh or an amount equivalent to the registration fee of the said project, whichever is more. For applications coming in from September 1 to September 30, the fine has been hiked to a minimum of Rs 2 lakh or an amount equivalent to double the registration fee, whichever is more. A ceiling of Rs 10 lakh has been set on the fine.

Mumbai Grahak Panchayat's Shirish Deshpande, said, "The law says that developers who haven't registered after the deadline of July 31 should be charged a penalty up to 10 per cent of the total project cost. However, they are charging very less. Rs 2 lakh as fine is setting a wrong example. MahaRERA is in the forefront and doing a good job, but if it goes soft, then the same example may be followed by other states."

Echoing the same sentiments, Dr Sanjay Chaturvedi, an expert on RERA said, "Fine should be moderate, but not Rs 2 lakh. This is very low."

Meanwhile, the authority in the order tried to justify the fine. "If any penalty linked to percentage of the project cost of each project has to be levied, every defaulting promoter will have to be given a chance to hear them individually before passing such an order. The act has in any case prohibited the said (unregistered) ongoing projects from advertising and selling with effect from August 1, MahaRERA recognised the fact that delaying the registration of the ongoing project will only jeopardise the interest of the allottees of the said projects, since the details will not be in the public domain for scrutiny and filing of complaints. It was hence decided that a similar procedure be adopted as for applications received up to August 16," he said Gautam Chaterjee, the chairman of MahaRERA did not respond to our messages.

Justified?

Authorities have tried to justify the low fine by saying the act has anyway prohibited the said (unregistered) ongoing projects from advertising and selling with effect from August 1, MahaRERA recognised the fact that delaying the registration of the ongoing project will only jeopardise the interest of the allottees 

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