 "MahaRERA freezes accounts of 1950 stalled realty projects to protect buyers")
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has frozen the bank accounts of more than 1,950 realty projects that have not progressed as promised, a decision aimed at protecting the interests of homebuyers and ensuring accountability among developers.
The regulatory body has even suspended the registration of these 1,950 real estate projects across the state after their developers failed to respond to notices regarding status updates. In the coming days, more than 3,499 lapsed real estate projects are expected to face similar action, MahaRERA said in a statement on January 9.
This crackdown follows MahaRERA's issuance of show-cause notices in December 2024 to approximately 10,771 projects, most of which are located in the Mumbai Metropolitan Region. The authority gave developers 30 days to comply with statutory obligations, specifically the mandatory disclosure of project details and relevant information on their websites.
The compliance issues primarily stem from project registration lapses due to developers' failure to submit Form 4, which signifies project completion. Real estate developers are required to submit an Occupation Certificate (OC) along with Form 4 upon project completion or request an extension. However, over 10,773 projects were declared lapsed, having not met these essential requirements.
Out of the 10,773 projects that were issued notices in December 2024, developers of 5,324 housing projects have replied to the show-cause notices. Of these, 3,517 projects have submitted their Occupancy Certificates (OC), and 524 have applied for the project's deadline to be extended.
"Currently, the response of 1,283 projects is under scrutiny, and action has been initiated to keep in abeyance 1,950 projects' registration with MahaRERA. Their bank accounts have been frozen. In these projects, transaction-related restrictions have been put into place," MahaRERA said.
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“A process has been initiated to take similar action against the remaining 3,499 housing projects, as they have not responded,” it said.
As per regulations, while registering with MahaRERA, developers need to specify the proposed project completion date. Once completed, they are expected to submit Form 4 with the OC or apply for an extension if delayed. Developers also have to submit quarterly and annual progress reports on MahaRERA's website within specified timelines, along with necessary supporting documents.
MahaRERA's decision to freeze the accounts is part of a broader effort to enforce compliance with the Real Estate (Regulation and Development) Act, 2016, which aims to enhance transparency and protect consumer interests in the real estate sector. By freezing the accounts, MahaRERA is not only holding developers accountable but also preventing them from misusing funds that were meant for project completion.
The authority has emphasized that it will take strict action against non-compliant developers, urging them to prioritize the completion of stalled projects and fulfill their commitments to buyers. Homebuyers, who have been significantly impacted by these delays, are hopeful that this regulatory intervention will lead to the timely completion of their homes.
In addition to the account freezes, MahaRERA is exploring further measures to enhance project transparency. This includes mandatory regular updates from developers regarding project progress and more stringent penalties for those who fail to meet deadlines.
"The primary objective of the Real Estate (Regulation and Development) Act, 2016 is to ensure transparency, accountability and financial discipline in the real estate sector. This is to protect the homebuyers' interests. For this purpose, every housing project must update its status on MahaRERA's website periodically – quarterly and annually. This keeps the homebuyers to stay informed about the project. However, in practice, it has been happening to a limited extent," said Manoj Saunik, chairman of MahaRERA.
As per the list shared by MahaRERA, the projects whose registration has been temporarily suspended are from across Maharashtra. While most of the projects are from the Mumbai Metropolitan Region, other cities include Pune, Nagpur, Nashik, and others.