MahaRERA Puts Real Estate Project Grading on Hold in Maharashtra
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has decided to put the grading of real estate projects on hold due to legal concerns. The Bombay High Court had earlier inquired about the possibility of MahaRERA rating developers to help homebu
MahareraReal EstateProject GradingMaharashtraBombay High CourtReal Estate NewsOct 16, 2024
“Hence, the plan to grade projects has been put on hold for now,” an official stated. MahaRERA had announced plans to start grading real estate projects last year to assist homebuyers in making informed decisions. The regulatory authority had chosen four parameters based on information uploaded by developers, including technical, financial, and legal details, as well as project overviews.
The Bombay High Court, during a hearing in February 2023 regarding a stalled Mumbai real estate market, asked the state government whether MahaRERA could rate or classify developers to ensure that buyers could make informed decisions about developers. MahaRERA proposed the grading matrix around four months after this query was raised by the court. The grading matrix was intended to be updated every six months in a financial year, with the first period set from October 1, 2023, to March 31, 2024. The grading matrix was scheduled to commence once the due date for uploading the last quarterly progress report (QPR) was met by April 20, 2024.
However, senior MahaRERA officials have now confirmed 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 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 official, who wished to remain anonymous, explained.
Since its inception in May 2017, MahaRERA has registered more than 47,400 projects, with over 15,600 projects completed. The authority has received more than 26,800 complaints, and orders have been passed in more than 17,900 cases, 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) includes measures to encourage grading of projects on various development parameters, including grading of promoters. MahaRERA had previously 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.
On September 20, Manoj Saunik, a former chief secretary of Maharashtra and a former journalist, took charge as the new chairman of MahaRERA. Saunik, a 1987 batch Indian Administrative Services (IAS) officer who retired as chief secretary in December 2023, was the principal advisor to Maharashtra Chief Minister Eknath Shinde. He replaces Ajoy Mehta as chairman of MahaRERA.
Frequently Asked Questions
What is the reason for putting the project grading on hold?
MahaRERA has put the project grading on hold because the Real Estate Regulatory Act, 2016, does not authorize regulators to grade projects, and there are concerns about potential legal challenges.
What were the four parameters chosen by MahaRERA for project grading?
The four parameters chosen by MahaRERA for project grading were technical details, financial details, legal details, and project overviews.
When was the plan to grade real estate projects initially announced?
The plan to grade real estate projects was initially announced by MahaRERA last year.
What is the role of the Bombay High Court in this decision?
The Bombay High Court had inquired about the possibility of MahaRERA rating developers to help homebuyers make informed decisions, which led MahaRERA to propose the grading matrix.
What is Section 32(f) of the Real Estate Regulatory Act, 2016?
Section 32(f) of the Real Estate Regulatory Act, 2016, includes measures to encourage grading of projects on various development parameters, including grading of promoters.
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