Maharashtra Housing Policy 2025: Proposing a Separate RERA-like Law for Real Estate Redevelopment
The Maharashtra Housing Policy 2025, approved last month, introduces a groundbreaking proposal for a separate RERA-like law to regulate real estate redevelopment projects. This move comes in response to the shortcomings of the Real Estate Regulatory Authority (RERA) Act, 2016, which does not cover redevelopment projects. As a result, complaints related to such projects have not been addressed by MahaRERA, leading to distress among homeowners and developers alike.
The Maharashtra government's cabinet approved the new Maharashtra Housing Policy 2025 in May 2025. However, it was not until July 23 that the Maharashtra Housing Department issued a Government Resolution (GR) on the policy, marking a significant step towards its implementation in the state.
What is Redevelopment?
In Maharashtra, several old buildings, especially those comprising two to seven storeys, are currently being redeveloped. Redevelopment of housing projects involves demolishing the old structure and replacing it with a modern, bigger building, subject to various norms. Residents of the old building typically receive larger apartments in the newer building for free, as the builder sells a certain number of apartments in the new building for a profit in the open market. The government also earns revenue by selling the floor space index (FSI) to the builder.
What Does the New Housing Policy Propose?
The approved housing policy states, 'The RERA Act does not apply to redeveloped properties. A separate law is necessary to regulate such redevelopment projects and properties.' The policy highlights that several redevelopment projects have stalled in the past, leaving homeowners in distress as developers stopped paying them rent.
Justifying the stringent regulation for redevelopment projects in Maharashtra, the housing policy reads, 'Due to several reasons, redevelopment projects either do not commence or get delayed, which results in financial, social, and mental distress for the flat owners. Most flat owners are forced to stay in transit camps or take monthly rent from the developer to arrange for accommodation. Many times, the developer stops providing residential rent. Redevelopment projects get delayed for various reasons.'
Targeted Measures for Stalled Projects
The Maharashtra government’s 2025 housing policy has also drafted targeted measures to revive stalled real estate and slum redevelopment projects, particularly using a cluster redevelopment model for greater efficiency and scale. The policy strongly pushes for self-redevelopment and has allocated ₹2,000 crore to support this initiative. Additionally, the state has proposed the formation of a dedicated cell to assist cooperative housing societies.
MahaRERA's Stance
The MahaRERA, which is the regulator of real estate projects in Maharashtra, has dismissed several complaints by homebuyers who have approached it for relief against developers in redevelopment projects. For instance, in December 2022, MahaRERA ruled that the redevelopment component of a real estate project is not covered under the RERA Act's purview.
In one specific case, MahaRERA disposed of a complaint from homeowners of a redevelopment project in Mumbai, citing a lack of jurisdiction. The authority advised the homeowners to approach other competent authorities for their complaint. Since its inception in May 2017, MahaRERA has handled around 30,000 complaints against homebuyers.
The proposal for a separate RERA-like law for redevelopment projects is a significant step towards ensuring better regulation and protection for all stakeholders involved in such projects. It aims to address the gaps in the current regulatory framework and provide a more robust mechanism for resolving disputes and ensuring timely completion of projects.
