MahaRERA Tightens the Screw: Defaulting Builders Face Jail for Non-Compliance
MahaRERA has introduced a new SOP that could see developers jailed for up to three months for failing to pay compensation to homebuyers, aiming to enforce compliance and restore trust in the real estate sector.
MahareraReal EstateCompensationHomebuyersDevelopersReal Estate MumbaiNov 23, 2025
In a circular released earlier this week, MahaRERA laid out a detailed mechanism to enforce compensation orders passed by its designated Adjudicating Officers. Homebuyers can now approach the regulator on a range of issues, including delayed possession, poor construction quality, inadequate parking, or missing amenities. Adjudicating officers will determine compensation based on the merits of each case.
Despite thousands of orders directing builders to compensate homebuyers, recovery has remained a persistent problem. Many buyers have struggled for months or even years to actually receive the dues, prompting the Bombay High Court, in an order dated October 6, to ask the authority to ensure time-bound enforcement.
A senior MahaRERA official said the new SOP marks a significant shift. “For the first time, cases where developers fail to pay compensation despite sufficient opportunities will be referred to the Principal Civil Court of the area. Developers may face imprisonment of up to three months. This is expected to greatly improve compliance and offer timely relief to homebuyers,” the official told Hindustan Times.
What Changes for Homebuyers
Under existing rules, a developer must pay compensation within 60 days of MahaRERA’s order. The new SOP outlines the process that will follow if a builder does not comply. The homebuyer may file an application seeking recovery of the compensation amount, interest for delayed possession, or any other dues.
MahaRERA will now hear such applications within 30 days. If the developer is found prima facie in default, the authority will give a reasonable deadline to pay. If the builder still does not comply, they may be directed to file an affidavit disclosing all movable and immovable assets, bank accounts, and investments.
A recovery warrant will be issued to the District Collector to initiate attachment or seizure of the developer’s assets and accounts. If the builder refuses to provide financial details or continues to default, MahaRERA will forward the case to the local Principal Civil Court, which can invoke provisions of the Civil Procedure Code and order imprisonment for up to three months.
Regulator Hopes to Restore Homebuyer Confidence
The authority says the tougher enforcement mechanism is aimed at addressing one of the biggest pain points for homebuyers—the gap between orders passed and compensation actually received. Officials believe that the threat of asset attachment and a possible jail term will ensure that developers take compliance seriously.
This new SOP is expected to bring a significant level of accountability and transparency to the real estate sector, thereby restoring the trust of homebuyers in the regulatory framework. MahaRERA’s efforts to enforce these measures are crucial for the overall health and stability of the real estate market in Maharashtra.
Frequently Asked Questions
What is the new SOP introduced by MahaRERA?
The new SOP introduced by MahaRERA outlines a step-by-step mechanism to enforce compensation orders passed by its designated Adjudicating Officers. If developers fail to pay compensation, they may face imprisonment of up to three months.
Why is this SOP necessary?
The SOP is necessary to address the persistent problem of homebuyers not receiving compensation despite orders from MahaRERA. It aims to ensure compliance and offer timely relief to homebuyers.
What actions can homebuyers take under the new SOP?
Homebuyers can file an application with MahaRERA seeking recovery of the compensation amount, interest for delayed possession, or any other dues within 30 days of the order.
What happens if a developer does not comply with the compensation order?
If a developer does not comply, they may be directed to file an affidavit disclosing all their assets. If they still do not comply, MahaRERA will forward the case to the local Principal Civil Court, which can order imprisonment for up to three months.
How does the new SOP benefit homebuyers?
The new SOP benefits homebuyers by providing a clear and enforceable mechanism to ensure they receive the compensation they are entitled to, thus restoring trust in the real estate regulatory framework.
Related News Articles
Real Estate Stocks Surge as Market Anticipates Sector Revival
Real estate stocks witnessed a significant jump, with the BSE Realty index climbing 240.94 points or 3.94% to 6,359.33 at 09:47 IST. Investors are showing renewed interest in the sector, driven by positive economic indicators and government policies.
UP RERA Approves ₹176-Crore Real Estate Projects in Six Cities
The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has approved six new real estate projects worth ₹176.28 crore across Ayodhya, Noida, Jhansi, Moradabad, Lucknow, and Prayagraj, signaling continued growth in the state's property market.
MBVA's 'Jail Bharo' Protest Demands End to Encroachment Drive in Chhatrapati Sambhajinagar
The Marathwada Bahujan Vikas Aghadi (MBVA) staged a 'Jail Bharo' protest in Chhatrapati Sambhajinagar, demanding the cancellation of the district collector's July 17 notification to clear government Gairan land and an immediate halt to the encroachment drive against marginalized communities.