Eighty-eight real estate developers have applied to the Maharashtra Real Estate Regulatory Authority (MahaRERA) for deregistration of their real estate projects, following which the regulator has sought objections, if any, from stakeholders.
MahaRERA had in February 2023 allowed deregistration of projects that were unviable or are were in trouble. Only projects in which claims of the homebuyers or other concerned stakeholders have been settled can be deregistered.
1) What does MahaRERA say?
In an order dated June 2, 2023, MahaRERA said promoters of 88 projects had applied for their deregistration. “Any person/legal entity having any objections to the deregistration of the real estate projects as mentioned in the displayed list are hereby called upon to submit their objections within 15 days from the date hereof. The objections be submitted to the following email email@example.com,” it said.
2) What are the prominent projects proposed for deregistration and developers who want to deregister them?
According to a list issued by MahaRERA, Kalpataru Group wants to deregister Kalpataru Centrino in Yerwada, Pune. Arihant Superstructures Limited wants to deregister Arihant Aakarshan Phase-2 in Navi Mumbai followed and Hubtown Group the Solaris project in Mumbai and Siddhi in Thane.
Hubtown could not be reached for a comment. Queries sent to Arihant did not elicit a response. The 88 projects are located in the Mumbai Metropolitan Region, Pune and Nagpur.
“We would like to clarify that the said entire land parcel (admeasuring approx. 5855.80 sq. mtrs. plus open space area adjacent thereto) was sold during Q2 of last financial FY 22-23. Further, we have not sold any units nor received any advance in relation to any unit(s) in our erstwhile project, Kalpataru Centrino. Therefore, the project is required to be de-registered, suspended or cancelled in accordance with the applicable regulations,” Kalpataru said in a statement.
Post the aforesaid sale of land, registration of the said project has become infructuous. Accordingly, we have duly applied for the de-registration of the project with MahaRERA as same is no more required in accordance to the order, regulations and process set by MahaRERA, it said.
3) What is the provision for deregistration?
MahaRERA said that under Section 34 of the Real Estate (Regulation and Development) Act, one of its functions is to register and regulate real estate projects and real estate agents. There are instances of developers registering projects on which they are unable to commence and complete construction, requiring the regulator to deregister them, it said.
4) Under what circumstances is deregistration allowed?
Lack of funds, projects not being economically viable, litigation, disputes including family disputes, and changes in government/planning authority notifications are some of the reasons cited for deregistration of real estate projects. In such cases, keeping these projects registered with MahaRERA will serve no useful purpose, nor would they be beneficial to any stakeholders, MahaRERA said in its February 2023 order.
5) What are the conditions for deregistration?
MahaRERA has listed four conditions under which real estate projects can be taken up for deregistration. The first is a real estate project that has zero buyers and the second is one in which the part that is sought to be deregistered has no allottees.
The third condition is that projects which have bookings shall be considered for deregistration if the rights of such allottees are settled by the promoter and documents to that effect are submitted for verification.
The fourth condition is that when de-registration of part of a real estate project affects the rights of the rest of the allottees in the balance part of the project, two-thirds of the allottees provide their consent for deregistration.
6) Is it an easy way out for developers?
According to legal experts, the deregistration applications should be considered only if the conditions laid down by MahaRERA are being followed by the developers to ensure they do not misuse the provision.
“As per the spirit of the MahaRERA circular issued regarding deregistration, these applications should be considered as per the conditions laid down in the Circular. Interest of homebuyers, financial institutions etc will remain protected provided conditions of the circular issued by MahaRERA are followed,” said Trupti Daphtary, a lawyer based in Mumbai.
She added: “This is a good move by MahaRERA and a wider publicity of this information will help the applications to be decided after consideration of the objections received. Further, other states must also borrow from these practices to allow applications only after following a prescribed procedure keeping in mind the rights of all stakeholders.”