Maharashtra's Real Estate Crisis: 33% of Projects Lapsed, Raising Concerns
With a staggering 33% of real estate projects lapsed in Maharashtra, the state is facing a significant crisis. This has led to a lack of confidence among homebuyers and raised alarms about the health of the real estate sector. The need for a more robust r
Real EstateMaharashtraReraProjectsLapsedReal Estate NewsJan 05, 2025
Out of the 32,000 projects registered with the Real Estate Regulatory Authority (RERA), a staggering 10,700 have failed to meet the prescribed timelines.
This highlights critical inefficiencies in the current regulatory framework.
The root cause of this issue is the failure of developers to comply with RERA requirements, particularly in submitting Form 4 along with the Occupancy Certificate (OC) before the expiration of the set deadlines.
This has created a ripple effect within the real estate market, causing a lack of confidence among homebuyers and raising concerns about the sector's health.
In addition to the lapsed projects, there is a growing number of stalled and non-active projects that, though not technically lapsed, remain dormant, exacerbating the overall situation.
Advocate Vinod Sampat, President of the Cooperative Societies Users Association, expressed his concern regarding the current state of affairs, calling for more stringent enforcement of RERA laws.
“We need a more robust regulatory framework.
Developers who fail to comply should face severe penalties, including non-bailable charges.
It is crucial that every construction project clearly outlines its stages, with no occupancy licenses issued before receiving a completion certificate,” Sampat stated.
He further emphasized that builders should not be allowed to sell more than 10% of the constructed area before fulfilling all obligations, including handing over flats and securing the completion certificate.
Sampat also criticized RERA for being too lenient towards builders, stating that it has ‘favoured builders from the beginning,’ and called for a shift in the way policies are enforced.
“Why should homebuyers receive such minimal compensation, while builders evade their responsibilities?” he questioned.
His proposal includes barring builders from selling new flats until they settle all previous liabilities as stipulated by the courts, ensuring that builders do not exploit legal loopholes.
These concerns have been echoed by industry leaders.
Domnic Romell, President of CREDAI-MCHI, pointed out that Maharashtra still leads the country in RERA registrations, with over 32,000 active projects and 29,000 registered real estate agents.
Despite these numbers, the 33 percent lapse rate is a significant concern.
Romell stressed that addressing these lapses requires collaboration between developers and the government, aiming to ensure that homebuyers are not disadvantaged by these systemic issues.
Additionally, Dhaval Ajmera, Secretary of CREDAI-MCHI, highlighted the challenges developers face, including rising construction costs, delays in approvals, and GST-related hurdles, which complicate compliance.
“Providing clearer guidance on these procedural challenges could significantly reduce the number of lapsed projects,” Ajmera suggested.
Founder President of CREDAI-MCHI Raigad, also called for a more pragmatic approach.
He proposed that certain obstacles, such as construction delays due to external factors, should be recognized as force majeure events under RERA guidelines.
“This would help alleviate some of the pressure on developers, ensuring that they can fulfill their obligations while maintaining the health of the real estate sector in Maharashtra,” Prajapati concluded.
The growing number of lapsed projects in Maharashtra underscores the urgency for reform within RERA.
Stakeholders are calling for more stringent laws, better enforcement, and a more balanced approach to ensure the long-term stability and growth of the state’s real estate market.
Frequently Asked Questions
What percentage of real estate projects in Maharashtra are lapsed?
Approximately 33 percent of active real estate projects in Maharashtra have lapsed.
What is the main reason for the lapsed projects?
The main reason for the lapsed projects is the failure of developers to comply with RERA requirements, particularly in submitting Form 4 along with the Occupancy Certificate (OC) before the expiration of the set deadlines.
What are the consequences of lapsed projects for homebuyers?
Lapsed projects have caused a lack of confidence among homebuyers and raised concerns about the health of the real estate sector, leading to potential financial losses and delays in home deliveries.
What is the Cooperative Societies Users Association's stance on this issue?
The Cooperative Societies Users Association, led by Advocate Vinod Sampat, is calling for more stringent enforcement of RERA laws and severe penalties for developers who fail to comply.
What solutions have been proposed by industry leaders?
Industry leaders have proposed better collaboration between developers and the government, clearer guidance on procedural challenges, and recognizing construction delays due to external factors as force majeure events under RERA guidelines.
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