Tag: maharera

Amendments made to the Maharashtra RERA rules stipulate that real estate developers can no longer claim expenses made on advertisements and promotions, as well as brokerage commissions as part of their construction costs.

According to RERA regulations, developers are required to deposit 70 per cent of the funds collected from home buyers in a separate RERA account. These funds can only be withdrawn for construction with appropriate certification from the architect and the chartered account. This was done to check the practice by developers to collect booking amounts and flat sales from home buyers and moving them to another project, often stalling the first project.

“The development cost or cost of construction of the project shall not include marketing and brokerage expenses towards sale of apartments. Such expenses though part of the project cost should not be borne from the amount that is required to be deposited in the designated separate account,’ said a notification issued by the state housing department on June 6.

‘Developers often show expenses for full-page ads also in this account. Now, those marketing expenses have to be shown in the remaining 30 per cent. For home buyers, it means that more money will available for completion of housing projects,’ said Gautam Chatterjee, chairperson, MahaRERA.

The notification has also reduced the minimum fee that developers need to deposit with MahaRERA at the time of registration of a project from Rs 50,000 to Rs 10,000 for plotted developments. Earlier, developers had to pay between Rs 50,000 and Rs 10 lakh as per the area of the land proposed to be developed at the rate of Rs 10 per sqm. Now, for plotted development, the registration fee will be calculated at the rate of Rs 5 per sqm.

The notification also gives brokers and real estate agents an opportunity to lodge complaints with MahaRERA against developers if their commission or fee was unpaid. “If there is a broker or real estate agent involved in the transaction between the developer and a home buyer, then his commission or brokerage from developer’s side or the buyer’s side should be paid to him as per agreed terms of payment. We have now included this in the RERA’s model form of agreement and brokers can lodge a complaint with MahaRERA and the authority will give them a hearing,’ Chatterjee said.

The new rules received mixed responses from the construction industry. While it was agreed that the amendments were consumer-friendly, questions were raised on the impact they have on incomplete projects.

Reacting to the amendments, Rohit Poddar, Managing Director, Poddar Housing and Development Ltd said, ‘The decision to eliminate the marketing and brokerage expenses from the cost of development is a good move from a consumer’s point of view. However, it should be subject to scrutiny whether it will have any direct impact on the prices for end consumers. Advertising, marketing, and brokerage costs are a part and parcel of the project cost, and it is recommended that they are included in the project cost, especially for the affordable segment.’

Rajan Bandelkar, President of National Real Estate Development Council (NAREDCO), Maharashtra said, “The amendment is likely to impact the unsold inventory. How does the developer sell these without including the marketing costs in the construction cost?”

Ameya Tandulkar, Chief Operating Officer at Paradigm Realty said, ‘The RERA Act clearly mentions that marketing costs should not be included in the 70 per cent funds meant for construction. This account was always meant to pay for land cost, construction cost, premiums for fungible FSI, and administrative costs incurred by the developer. I think the amended rule only reiterates that developers should not include marketing costs.”

Amit Wadhwani, Co-Founder, Sai Estate Consultants Chembur Private Limited (SECCPL) said, “RERA is definitely paving the way for a transparent sector.”

Source: www.realty.economictimes.indiatimes.com/news/industry/maharera-no-advertisement-expenses-in-construction-costs/69781792

Maharashtra Real Estate Rules 06.06.2019

Earlier, MahaRERA website had an inactive tab which prevented a home buyer from filing an online application for non-execution till the 60-day mandated period for appeal was over.

Home buyers who get favourable orders from the Maharashtra Real Estate Regulatory Authority (MahaRERA) will now be able to file online applications for non-execution of these orders even during the 60-day period granted to the developer to proffer an appeal with the Maharashtra Real Estate Appellate Tribunal (MREAT).

Earlier, MahaRERA website had an inactive tab which prevented a home buyer from filing an online application for non-execution till the 60-day mandated period for appeal was over. However, following a writ petition filed by a 69-year-old Kandivali home buyer in the Bombay High Court, MahaRERA has now changed this process, and made the tab for non-execution active. As a result, home buyers will be able to file for non-execution while the developer’s appeal pending or is being heard by the Appellate Tribunal.

“Yes, we have changed that process. Now, we have made the tab active so that the home buyers would be able to file application for non-execution even while the appeal process is on, but we will hear the application only after the mandated 60-day period is over and after checking the status of the appeal with the Tribunal,” said Gautam Chatterjee, chairperson of MahaRERA.

69-year-old Baheti had booked a flat in Kandivali East in May 2015 with the promise of possession by December 31, 2015. When the developer failed to deliver and revised the date to 2023, she filed a complaint with MahaRERA seeking a refund.

In November 2018, MahaRERA asked the developer to refund Rs 6.84 lakh with 10.5 per cent interest. The developer filed an online appeal, but did not deposit the statutory 30 per cent of the refund amount without which the appeal would not be entertained by the Tribunal. When Baheti tried to file for non-execution, the tab on MahaRERA portal remained inactive even after mandated 60 days. Aggrieved by this, she decided to file a writ petition.

“The developer will neither remove the defects in the appeal nor pay the statutory 30 per cent amount and will delay the matter. Further the developer is in a win win situation as the petitioner cannot file an appeal,” her petition said.

Advocate Tanuj Lodha, who represents Baheti, execution pending appeal cannot be denied, unless there is a stay order in Appeal. “The procedure of making online “Non execution of Order” tab inactive on mere filing of an online Appeal (without depositing minimum 30% statutory amount) is being used as a mischief to frustrate the aggrieved homebuyers,” said Lodha.

Meanwhile, MahaRERA has also taken note of more than 176 recovery orders issued against non-complying developers still pending with the District Collectors, and decided to periodically review the pendency and facilitate its implementation. “We had a meeting of all MahaRERA members, and it was decided that we should periodically review the pending recovery orders, and take appropriate decisions,” MahaRERA member Vijay Satbir Singh said.

Source: https://realty.economictimes.indiatimes.com/news/regulatory/maharera-now-opens-execution-tabs-during-appeal-process/69606692

Housing regulator rules in favour of home buyer seeking damages from developer in lieu of a project whose possession was delayed by two years.

Housing regulator Maharashtra Real Estate Regulatory Authority (MahaRERA) has ordered a developer to pay a home buyer interest for delaying the project.

While ruling in favour of the home buyer, the authority stated that it has jurisdiction over an ongoing project even after an Occupancy Certificate was issued to the developer, adding that it can adjudicate the dispute despite an arbitration clause in the agreement.

The ruling came on a complaint filed by Suresh Swamy, who had booked flat No. 301 in Tower T8 of Emerald Isle project in Powai where he was supposed to move in by September 2017. He was seeking interest on the amount he had paid till actual possession. MahaRERA ruled in Swamy’s favour directing developer L&T Ltd to pay simple interest at 10.75 per cent on a sum of Rs 4.69 crore from October 1, 2017, for delayed possession.

Advocate Manish Gala, appearing for L&T Ltd had argued that the authority had no jurisdiction in the matter due to three key factors. Firstly, they argued that the Occupancy Certificate for Tower T8 had been received on December 21, 2018, well ahead of the December 31, 2018 revised possession deadline given to MahaRERA and hence there was no delay. The developer said the project is complete and since it is not an ongoing real estate project, the Authority does not have jurisdiction to entertain the complaint.

Secondly, the developer contended that the agreement for sale was executed under Maharashtra Occupation of Flats Act (MOFA) and Section 18 of RERA cannot be applied retrospectively. Thirdly, the agreement for sale had an arbitration clause and hence the dispute should be referred to the Arbitrator under Section 7 of Arbitration and Conciliation Act, 1996.

Adv Anil Dsouza, appearing for the home buyer pointed out that the OC was a Part OC issued by the BMC and the developer was erroneously using the term.

Rejecting the argument that it no longer has jurisdiction after OC is received or possession is offered, MahaRERA member Bhalchandra Kapadnis cited several sections in RERA to support his point. He said Section 7 and 8 of RERA obligates the Authority to carry out remaining development work if the registration of the projects gets revoked. He said section 14 (3) of RERA provides that if any structural defect or quality defect is found within five years from the date of possession, the promoter is duty bound to rectify such defects without further charge within 30 days.

“Therefore, I hold that the jurisdiction of the Authority is not lost only because of the receipt of the occupancy Certification or on completion of the project or when the possession is offered,” he observed. He cited the HC judgment in Neelkamal Realtors case to rule that RERA provisions are applicable to agreements executed even before it came into operation on May 1, 2017.

Source – https://realty.economictimes.indiatimes.com/news/regulatory/maharera-still-has-jurisdiction-over-projects-that-have-an-oc/69300982

Pune

The Maharashtra Real Estate Regulatory Authority (MahaRERA), which completed two years on May 1, will shift its focus on housing projects that are under stress and incomplete for various reasons.

The regulator has identified 60-70 such “stressed” projects in the state — mainly in Pune, Mumbai and Thane — and has chalked out a plan to reach out to the members of such projects; to guide them in forming an association and help them complete the project.

In March this year, MahaRERA had issued a standard operating procedure (SOP), allowing homebuyers to remove a developer in case the project was delayed, and hand it over to an expert panel for completion — with the regulator monitoring the proceedings. This step could be initiated only if at least 51% of the homebuyers affected by the delayed project gave their consent.

Over the last two years, more than 20,000 projects have been registered with MahaRERA in the state — the highest in the country. However, the number of completed projects stands at a little over 4,500.

Among these registered projects, there are many yet to be completed despite the issuance of orders and even recovery warrants, allowing the revenue authorities to auction the property and return the money to homebuyers.

“The (March) order was issued to benefit those affected by such stressed projects, where the developer has not been able to complete the project due to a paucity of funds or any other reason, and homebuyers are stuck with the project for long periods of time. We have assessed 60-70 projects in three cities and now plan to reach out to the complainants as well as the remaining members,” MahaRERA secretary Vasant Prabhu said. The regulator is planning a workshop for affected buyers.

MahaRERA had issued the order under Section 37 of the Real Estate (Regulation and Development) Act (RERA). Under Sections 7 and 8 of RERA, a regulator can revoke the registration of a project as well as remove the developer, provided 51% of the project allottees agree on such an action. A separate panel under MahaRERA, with the help of experts, would carry out the remaining development work and take the project forward to completion.

However, there’s a caveat: this process will be possible only for non-litigated projects.

Once the revocation orders are issued, the developer will lose all right to the project. The authority will set up a panel to prepare a project report within four months to decide the future course.

Source – www.realty.economictimes.indiatimes.com/news/regulatory/maharera-to-focus-on-70-stress-projects-in-maharashtra/69184915

Pune

The Maharashtra Real Estate Regulatory Authority (MahaRERA) on Thursday issued a standard operating procedure (SOP) to allow homebuyers to remove a developer in case the project was delayed. The project would then be handed over to an expert panel for completion.

The authority, however, clarified that it could initiate such action only against non-litigated projects.

“It will help complete all delayed projects in the state. This is an unique move, probably the first in the country, under the Real Estate Regulatory Act, 2016, which will help the association of allottees (homebuyers) take control of the situation,’’ Vasant Prabhu, MahaRERA secretary, told TOI.

In case of revocation orders, the developer will lose rights to the project and his bank accounts will stay frozen, the order said, adding that the authority would then set up a panel of experts to prepare a project report within four months to decide on future course of action.

The panel would prepare a blueprint for project completion. The blueprint would consist financial details and a detailed roadmap towards arranging the said finances.

The SOP has been issued under section 37 of the RERA Act, 2016, with reference to sections 7 and 8. MahaRERA officials said the authority will only consider complaints received from an association of allottees and not from single homebuyers for such action. “The complainants should not be less than 51% of the total allottees,” they said.

MahaRERA will serve a notice to the promoter with 30-day deadline to present his/her case.

Source – www.realty.economictimes.indiatimes.com/news/regulatory/maharera-releases-sop-to-remove-delaying-developers/68623712

Maharashtra

The Maharashtra Real Estate Regulatory Authority has decided to give developers a second chance to complete delayed projects after the usual extension of a year, provided over 50% customers of the property concerned agree to it.

Vasant Prabhu, the Maharashtra Real Estate Regulatory Authority (MahaRERA) secretary, said an order was issued last week to give genuine developers a second chance to complete a stalled project if the consumers were willing to wait. He said, “The extension is subject to consent of more than half the flat buyers and a time-frame would be set.”

Prabhu said, “We were getting complaints of delay in project execution. With this order, consumers can take a call on if they want to continue with the project. If more than 50% consumers agree, we can give an extension to the developer.”

Nearly 90% of the complaints registered with the MahaRERA are regarding delay in execution of projects. State president of Credai Shantilal Kataria said the order would not only benefit the consumers, but also the developers.

“It is neither easy for a consumer nor a developer to cancel a project. Given more time, genuine developers will complete projects within the time-frame decided by both the parties,” said Kataria.

The real estate sector faced a rough patch in the past two-three years. It is slowly on the recovery path. Property consultants closely monitoring the market stated that the real estate sector was set to grow this year.

“The issue of stalled projects and liquidity crisis continued to confound the housing sector last year though it continued its transition into a relatively more transparent and end-user driven market,” said Anuj Puri, chairman of Anarock Property Consultants. He added that builders were extremely cautious about launching new projects to align supply with the existing buyer demand.

Mumbai Grahak Panchayat (MGP) – the consumer forum taking up the issues of MahaRERA from the inception-welcomed the move of giving a say to the consumers but stressed that the authority should have specified that the “association of allottees” should be appointed after 50% booking of flats in a project was done.

Sources – www.realty.economictimes.indiatimes.com/news/regulatory/maharera-allows-builders-a-second-chance-if-homebuyers-agree/67985471

MahaRERA Updates

• Project Registration Status
  • Projects Registered but not completed: 15796
  • Projects Registered and completed: 3587
  • Projects yet to be Registered: 109
• Realtor Registration Status
  • Registered Realtors: 17980
  • Realtors yet to be Registered: 186
• Complaint Disposal Status
  • Complaint Received and disposed: 3422
  • Complaint in process of hearing: 2108

MahaRERA website: www.maharera.mahaonline.gov.in

MahaRERA Updates

In, Avinash Saraf versus Runwal Homes Private Limited case, the landmark judgement given by MAHARERA, Mumbai, having complaint number 32, Dated 13th October 2017. Final judgement is given by Honorable Shri B. D. KAPADNIS. The complainants contended that they have paid 97% of total consideration of the flat. The date of possession of the flat was August, 2016, as per agreement of sale executed in November 2014, but the respondent failed to give the Possession in time.

And hence the complainant demanded the amount of consideration with interest @ 21% p.a. from the respondent with compensation for amount expended towards stamp duty and registration charges.

The respondent contended that MAHARERA has come into effect from 1st May 2017. Therefore MAHARERA has no jurisdiction entertain this complaint. The date of possession was delayed due to delay in getting permission for constructing parking from MCGM (Municipal Corporation of Greater Mumbai), for the reasons beyond control of the respondent.

Now point for consideration before The Honorable judge was whether the complainant is entitled to get back the amount paid to respondent with interest and compensation? He answered affirmatively with the following reasons.

The cause of action for claiming possession after the lapse of agreed date of possession becomes recurring course of action. Therefore MAHARERA has the jurisdiction under section 79 of the Act. The reasons given by respondent for delay in possession is also not acceptable, since the agreement was executed in November 2014 it means the respondent was aware of the time for giving possession.

Finally honorable judge has delivered the following judgment.

To refund entire amount paid to the respondent till date with interest and compensation for amount paid towards stamp duty and registration charges. Rate of interest upto the date of 30th April 2017 was decided @ 9% per annum. And from 1st May 2017 the rate of interest was decided to be the interest at SBI’s highest marginal cost of lending rate + 2% p.a. till the date of final payment to the complainant.

The complainant got finally Rs. 1,74,17,986/- + Rs.8,86,800/- towards stamp duty registration charges + Rs. 11,00,000/- towards interest till 30th April 2017 + interest at SBI marginal cost of lending rate plus 2% p.a. till the date of final payment to the complainant.

Soure: https://taxguru.in/corporate-law/customs-king-maharera-mumbais-landmark-judgement-refund-amount-interest-delayed-possession.html?amp

MahaRERA Updates

• PUNE: Promoters will have to submit “quality assurance certificate” issued by their engineers on the MahaRERA website from December 1.
• The move follows complaints of poor-quality work or material used in various projects. “The engineer or the site supervisor would have to issue a certificate, like an affidavit, where they would have to state that the work is being carried out in accordance with the development permission and as per the approved plan. Material testing and workmanship will be part of the certification,” MahaRERA secretary Vasant Prabhu stated in a circular issued early this week.
• MahaRERA officials said the promoters who are yet to register their projects should submit the certificate with other details at the time of registration. “The promoters who have already registered should upload the certificate at the earliest on the authority’s portal,” they added.
• As a part of the certification process, the engineer will keep a check on the basic material used, including cement, bricks, concrete and steel, besides the workmanship quality as well, the officials said.

Soure: https://realty.economictimes.indiatimes.com/news/regulatory/maharera-directs-promoters-to-upload-quality-certificate-from-dec-1/66858202