Project Transfer Rules: Original Developer Still Liable for Homebuyer Claims, MahaRERA Clarifies
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has issued a clear directive stating that the original developer remains responsible for addressing homebuyer claims even if the project is transferred to a new developer. This clarification came in the context of a stalled slum rehabilitation project in Mumbai's Andheri area.
Real EstateMahareraHomebuyersDeveloperProject TransferReal Estate MumbaiMay 23, 2025
This ruling was specifically in response to a stalled real estate project involving slum rehabilitation in Mumbai’s Andheri area, where the Slum Rehabilitation Authority (SRA) appointed a new developer after the original one defaulted. According to MahaRERA, the incoming developer bears no liability for past obligations towards earlier homebuyers.
The case pertains to a slum rehabilitation project in Mumbai’s Andheri area. The SRA appointed a new developer after terminating the previous one for allegedly failing to fulfill its construction and delivery obligations. The project, registered with MahaRERA in 2017, spans 2,460 square meters and comprises a single 20-storey building with 113 apartments intended for sale. Of these, 48 units have already been sold to homebuyers, who are still awaiting possession.
In its recent order dated May 16, 2025, MahaRERA clarified that homebuyers must direct their claims to the original (old) developer, not the newly appointed one. MahaRERA emphasized that the project in Mumbai’s Andheri area is not a routine case of project transfer. The transfer occurred because the SRA terminated the old developer for defaulting on project obligations and subsequently appointed a new developer to complete the work.
According to MahaRERA, at the time of this transition, the new developer was instructed to reimburse all project-related expenditures incurred by the old developer. Once this reimbursement is completed, the old developer remains solely responsible for fulfilling all obligations toward the existing allottees (homebuyers). “This arrangement, as set out by the SRA, ensures that the interests of existing homebuyers are protected while allowing them to pursue claims against the original developer,” MahaRERA noted.
To ensure a clear separation of responsibilities, MahaRERA has assigned the incoming developer a new registration number. Meanwhile, the registration number of the old developer has been temporarily suspended to maintain regulatory oversight and ensure that it meets its commitments to existing homebuyers. In summary, while the new developer will carry out construction going forward, it will not bear any liability for the commitments or defaults of the previous developer.
MahaRERA concluded the case by directing that the new developer be assigned a separate registration number and instructed to open a dedicated escrow account for the project. The authority also issued clear directives to the original (old) developer: it must not market, sell, or advertise any apartments in the project going forward. Additionally, the old developer is required to fulfill all obligations toward existing homebuyers and settle all pending claims. MahaRERA further stated that if the old developer fails to comply with these directives, affected homebuyers may approach the Authority for appropriate redressal.
Frequently Asked Questions
What is the role of MahaRERA in real estate projects?
The Maharashtra Real Estate Regulatory Authority (MahaRERA) is responsible for regulating and overseeing real estate projects in Maharashtra. It ensures that developers comply with the Real Estate (Regulation and Development) Act, 2016, and protects the interests of homebuyers.
What happens if a project is transferred to a new developer?
If a project is transferred to a new developer, MahaRERA clarifies that the original developer remains responsible for addressing the claims of existing homebuyers. The new developer is not liable for past obligations.
How does the SRA appoint a new developer for a slum rehabilitation project?
The Slum Rehabilitation Authority (SRA) can appoint a new developer if the original developer defaults on project obligations. The new developer is responsible for completing the construction and fulfilling the remaining project requirements.
What should homebuyers do if they have claims against the original developer?
Homebuyers should direct their claims to the original developer. If the original developer fails to comply with their obligations, homebuyers can approach MahaRERA for redressal.
What is the significance of the new registration number for the incoming developer?
The new registration number assigned to the incoming developer ensures a clear separation of responsibilities. It helps in maintaining regulatory oversight and ensures that the new developer is not liable for the past obligations of the original developer.
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