MahaRERA Cracks Down On 8,212 Defaulting Builders: Show Cause Notices Issued For Failing To Update Quarterly Progress Reports

Mumbai: A total of 33,029 housing projects are in various stages of construction across Maharashtra. The Real Estate (Regulation and Development) Act, 2016 makes it mandatory for the developers to register their housing projects and upload Forms 1, 2 and 3 on the Maharashtra Real Estate Regulatory Authority's (MahaRERA's) website every 3 months. In these forms, the builder has to detail out the number of flats and garages registered in the project, how much money was received, expenditure incurred and also if there were any amendments made to the project’s construction plan.

April 20 Deadline Missed

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As per the regulation, progress reports for Jan-Mar quarter were required to be updated by April 20. However, of the 33,029 projects, 8,212 projects have not updated the QPRs within the given deadline. MahaRERA has taken a serious note of the indifference shown by the erring developers. QPRs help potential as well as already invested homebuyers to access latest information about the project's status.

Therefore, MahaRERA has issued show cause notices to all those entities who have violated Section 7 of the RERA Act.

60 Days to Respond and Update QPRs

The erring builders have been given 60 days to respond as well as update the QPRs. If they fail to respond within this duration, MahaRERA may initiate strict action. These may include cancelling or keeping project’s registration in abeyance as it amounts to developer's indifference towards the home purchasers as well as breach of such homebuyer's rights.

Due to this violation, the bank accounts of the housing project are likely to be frozen, restrictions may be placed on its advertisement and marketing. Additionally, instructions may also be given to the Joint District Registrar not to register the purchase as well as sale transactions of homes in those projects. This violation also attracts a penalty of Rs 50,000 to facilitating property's registration.

Pune Tops the List with 1,957 Defaulting Projects

Most of the projects not to have provided the QPRs are from the Pune district at 1,957. There are 4,644 projects from the Mumbai Metropolitan Region including Konkan. Of them, 1,465 are from Thane and 1,263 are from Mumbai Suburban areas.

In addition to Section 3, 4, 5 and 11 of the RERA Act, categories 1, 2, 3 and 4 of Order No. 33/2022 dated July 5, 2022 also highlights the mandatory requirement for developers to update project details on the website in a prescribed format that too in a time bound manner. This compliance is necessary on a quarter as well as annual basis. The details to be furnished are of immense importance to a homebuyer such as changes in the approved building plan, project's latest status, how many plots, flats, garages have been registered in the project, how much revenue has been received.

70% of Booking Amount Must Be in Dedicated Account

Another crucial aspect concerns MahaRERA registration number, wherein a dedicated bank account has to be operated for the project. In this bank account, 70% of the booking amount received from the homebuyers is to be deposited. While withdrawing funds for the project, Forms 1, 2 and 3 certified by project's engineer, architect and chartered accountant declaring project's progress and expenditure estimate is to be disclosed. These forms are also required to be sent to MahaRERA. In case if the amount has not been withdrawn in any given financial quarter, in such a scenario, it is necessary to self certify the details of how much funds has been deposited in the bank account during the same period and disclose such a certificate on MahaRERA's website.

All these compliances are notified to the developers at the time of their project's registration with MahaRERA. These clauses are also unambiguously mentioned on the registration certificate issued for each of the projects. Despite these measures, the developers of 8,212 projects of the overall 33,029 have not updated the QPRs on MahaRERA's portal. Hence, under Section 7, show cause notices have been issued to the erring builders.

Chairman Manoj Saunik's Statement

MahaRERA Chairman Manoj Saunik said, MahaRERA has always been striving to protect homebuyers' interest and ensure he or she does not get cheated in any manner. “From the initiation of the project till its completion, all the information that is available to the developer of the project should also be available to the homebuyer. To facilitate this, MahaRERA is closely monitoring the real estate sector at varied levels, based on existing regulatory provisions,“ he said.

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He furthermore said that One of these is to ensure every housing project is registered with MahaRERA and its latest status is updated on MahaRERA's website Quarterly . For this reason, MahaRERA insists that the compliance report of every project is submitted within the predefined deadline. If any developer does not update the quarterly progress report of their project despite repeated follow-ups, MahaRERA will not hesitate to cancel or keep such project's registration in abeyance. MahaRERA is of the view that such an unpleasant situation must not arise at all.

District-Wise Projects Issued Show Cause Notices:

Mumbai Metropolitan Region including Konkan - Total 4,644

Thane 1,475

Mumbai Suburban 1,263

Mumbai City 267

Raigad 842

Palghar 612

Ratnagiri 125

Sindhudurg 70

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