MahaRERA Pauses Real Estate Project Grading in Maharashtra
MahaRERA, the regulator for the real estate sector in Maharashtra, has decided to put the grading of real estate projects on hold. Senior officials have cited the Real Estate Regulatory Act 2016 as not authorizing them to grade projects, leading to the de
MahareraReal Estate GradingMaharashtra Real EstateReal Estate Regulatory ActMaharera ChairmanReal Estate MaharashtraOct 16, 2024
The Maharashtra Real Estate Regulatory Authority had announced plans to start grading real estate projects last year to help homebuyers make informed decisions. The regulatory authority had chosen four parameters based on information uploaded by the developers. These parameters included technical, financial, and legal details, along with project overviews.
The Bombay High Court, while hearing a case relating to a stalled Mumbai real estate market in February 2023, had asked the state government whether MahaRERA could rate or classify developers to ensure that buyers can make informed decisions regarding the developer. MahaRERA had 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 will be from October 1, 2023 to March 31, 2024. The grading matrix shall commence once the due date for uploading the last quarterly progress report (QPR) is done by April 20, 2024,' MahaRERA had announced in September 2023.
However, senior MahaRERA officials have now stated that the plan to grade real estate projects 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 by someone in the court of law tomorrow. We do not want this to happen and hence are not rushing into anything like this,' a senior MahaRERA official, not wishing to be named, told HT.com.
Since its inception in May 2017, MahaRERA has registered more than 47,400 projects and completed more than 15,600 of them. The regulator has received over 26,800 complaints, with orders passed in more than 17,900 complaints, 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. Further, section 32 (f) mentions measures to encourage grading of projects on various parameters of development, including grading of promoters.
The MahaRERA, in June 2023, 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,' Trupti Daphtary, a Mumbai-based advocate and solicitor, explained.
Manoj Saunik, a former chief secretary of Maharashtra and a former journalist, took charge as the new chairman of Maharashtra Real Estate Regulatory Authority (MahaRERA) on September 20. Saunik, a 1987 batch Indian Administrative Services (IAS) officer, retired as CS of Maharashtra in December 2023. He was the principal advisor to Maharashtra Chief Minister Eknath Shinde and replaces Ajoy Mehta as the chairman of MahaRERA.
Frequently Asked Questions
Why has MahaRERA decided to put the grading of real estate projects on hold?
MahaRERA has decided to put the grading of real estate projects on hold because the Real Estate Regulatory Act, 2016, does not authorize regulators to grade projects. Senior officials are concerned that proceeding with grading might lead to legal challenges in the future.
What parameters were proposed for grading real estate projects?
The proposed parameters for grading real estate projects included technical, financial, legal details, and project overviews based on information uploaded by developers.
What was the Bombay High Court's role in the grading initiative?
The Bombay High Court, while hearing a case relating to a stalled Mumbai real estate market in February 2023, had asked the state government whether MahaRERA could rate or classify developers to ensure that buyers can make informed decisions regarding the developer. This query prompted MahaRERA to propose a grading matrix.
How many projects has MahaRERA registered and completed since its inception?
Since its inception in May 2017, MahaRERA has registered more than 47,400 projects and completed more than 15,600 of them.
Who is the new chairman of MahaRERA and what is his background?
The new chairman of MahaRERA is Manoj Saunik, a former chief secretary of Maharashtra and a former journalist. He is a 1987 batch Indian Administrative Services (IAS) officer who retired as CS of Maharashtra in December 2023 and was the principal advisor to Maharashtra Chief Minister Eknath Shinde.
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