MahaRERA Tightens the Screw: Developers Face Jail for Non-Compliance
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has introduced a stricter Standard Operating Procedure (SOP) that can result in up to three months of imprisonment for developers who fail to pay compensation to homebuyers. This move aims to enforce compliance and restore trust in the real estate sector.
MahareraReal EstateCompensationDevelopersHomebuyersReal Estate MaharashtraNov 23, 2025
In a circular released earlier this week, MahaRERA laid out a step-by-step mechanism to enforce compensation orders passed by its designated Adjudicating Officers. Homebuyers can approach the regulator on a range of issues, including delayed possession, poor construction quality, inadequate parking, or missing amenities. Following this, adjudicating officers 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 move is expected to have a significant impact on the real estate sector, making it more transparent and accountable. Homebuyers, who have often been left in the lurch due to delays and non-compliance, can now look forward to a more robust regulatory framework that protects their interests.
Frequently Asked Questions
What is MahaRERA?
MahaRERA stands for the Maharashtra Real Estate Regulatory Authority. It is a regulatory body established to oversee and regulate the real estate sector in the state of Maharashtra, ensuring transparency and accountability in real estate transactions.
Why did MahaRERA introduce the new SOP?
MahaRERA introduced the new SOP to address the persistent issue of developers failing to pay compensation to homebuyers. The new procedure aims to enforce compliance and ensure that homebuyers receive the compensation they are entitled to.
What are the consequences for developers who fail to pay compensation?
Developers who fail to pay compensation as directed by MahaRERA can face up to three months of imprisonment. They may also have their assets and bank accounts attached or seized by the District Collector.
How can homebuyers file for compensation 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. MahaRERA will hear these applications within 30 days and take necessary action if the developer is found in default.
What is the role of the Principal Civil Court in this process?
If a developer continues to default after being given multiple opportunities to pay compensation, MahaRERA will forward the case to the local Principal Civil Court. The court can then order the imprisonment of the developer for up to three months under the Civil Procedure Code.
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