MahaRERA Halts Real Estate Project Grading in Maharashtra
MahaRERA officials have decided to put the grading of real estate projects in Maharashtra on hold, citing the lack of authorization under the Real Estate Regulatory Act 2016.
MahareraReal EstateProject GradingMaharashtraReal Estate Regulatory ActReal EstateOct 16, 2024
MahaRERA had announced plans to start grading real estate projects last year to help homebuyers make more informed decisions. The regulatory authority had chosen four parameters based on information uploaded by the developers. These included technical, financial, and legal details, as well as a project overview.
The Bombay High Court, while hearing a case related to the stalled Mumbai real estate market in February 2023, had asked the state government whether MahaRERA could rate or classify developers to ensure that buyers could make informed decisions regarding the developer. MahaRERA proposed the grading matrix around four months after this query was raised by the Bombay High Court.
According to MahaRERA, the grading matrix was proposed to be updated every six months in a financial year. The first period was to be from October 1, 2023, to March 31, 2024. The grading matrix was to commence once the due date for uploading the last quarterly progress report (QPR) was completed by April 20, 2024.
However, senior MahaRERA officials have now told HT.com that the plan to grade real estate projects in Maharashtra has been put on hold. 'We are not going ahead with the plan for grading projects. How can MahaRERA, being a regulatory watchdog, also rate or grade projects? The Real Estate Regulatory Act does not categorically allow the same. If we go ahead with grading, it might be challenged in the court of law. We do not want this to happen and hence are not rushing into anything like this,' said a senior MahaRERA official, who wished to remain anonymous.
Since its inception in May 2017, MahaRERA has registered more than 47,400 projects, of which more than 15,600 have been completed. The regulatory authority has also received more than 26,800 complaints, with orders passed in more than 17,900 of them, according to MahaRERA data.
Section 32 of the Real Estate Regulatory Act, 2016, states that the Authority shall facilitate the growth and promotion of a healthy, transparent, efficient, and competitive real estate sector by making recommendations to the appropriate government or competent authority. Section 32(f) specifically mentions measures to encourage grading of projects on various parameters of development, including grading of promoters.
In June 2023, MahaRERA had stated that one of the key functions of Section 32(f) is to facilitate grading of projects on various parameters of development, including grading of promoters (developers). It had released a consultation paper outlining the framework for grading real estate projects and invited public suggestions and objections.
‘Under Section 32(f) the Authority could propose recommendations to the relevant Government or competent authority for promoting the grading of projects based on various parameters relating to project development,’ explained Trupti Daphtary, a Mumbai-based advocate and solicitor.
Manoj Saunik, a former chief secretary (CS) of Maharashtra and a former journalist, took charge as the new chairman of MahaRERA on September 20, 2023. Saunik, a 1987 batch Indian Administrative Services (IAS) officer who retired as CS of Maharashtra in December 2023, was the principal advisor to Maharashtra Chief Minister Eknath Shinde. He replaces Ajoy Mehta as the chairman of MahaRERA.
Frequently Asked Questions
What is MahaRERA?
MahaRERA stands for Maharashtra Real Estate Regulatory Authority. It is the regulatory body in Maharashtra, India, responsible for overseeing and ensuring transparency in real estate transactions.
Why did MahaRERA propose grading real estate projects?
MahaRERA proposed grading real estate projects to help homebuyers make more informed decisions by providing ratings based on various parameters such as technical, financial, and legal details, and project overview.
Why has MahaRERA put the grading plan on hold?
MahaRERA has put the grading plan on hold because the Real Estate Regulatory Act, 2016, does not explicitly authorize regulators to grade projects. There is a concern that proceeding with the plan could lead to legal challenges.
How many projects has MahaRERA registered since its inception?
Since MahaRERA's inception in May 2017, it has registered more than 47,400 projects, with over 15,600 of them completed.
What does Section 32(f) of the Real Estate Regulatory Act say?
Section 32(f) of the Real Estate Regulatory Act, 2016, states that the Authority can make recommendations to the appropriate government or competent authority for measures to encourage grading of projects on various parameters of development, including grading of promoters.
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