Real Estate: Positive Impact of MahaRERA’s Stringent Measures Evident in Project Reporting

Mumbai, 14th December 2023: The rigorous enforcement of rules by Maharashtra Real Estate Regulatory Authority (MahaRERA), such as imposing a moratorium on housing projects failing to update quarterly information, is yielding positive outcomes. In January, only 2 out of 746 projects voluntarily updated their Quarterly Progress Report (QPR). However, in February, 131 out of 700 projects, and in March, 150 out of 443 projects, took proactive steps to update their progress reports, marking a significant improvement.

The legal requirement mandates the registration and timely update of details such as the number of flats and garages registered, funds received and spent, and any alterations in project plans. Forms 1, 2, and 3 containing this information must be registered and updated on the Maharera website.

To ensure the strict adherence of these regulations for consumer protection, MahaRERA initiated the “Scrutiny of Quarterly Financial Progress Reports of Projects” starting with the quarterly reports in January. The Financial Quarter-Based Project Progress Reporting System was introduced to monitor compliance closely. MahaRERA has unequivocally communicated that any negligence or delay in this regard will not be tolerated.

As a consequence, out of 746 projects registered in January, notices were issued under Section 7 to 744 projects, and the registration of 363 projects was directly suspended, impacting all transactions related to these projects.

The ripple effect of these stringent measures is evident in the improved response from projects reported in February and March. Out of 700 projects reported in February and 443 in March, 131 and 150 projects, respectively, adhered to the deadlines, updating their quarterly forms on the MahaRERA website.

However, approximately 463 projects reported in February and March, out of a total of 1143, are at risk of facing suspension action under Section 7 due to non-compliance. Decisions will be made soon after completing the prescribed procedures.

In addition to the rules outlined in Section 11, Rules 3, 4, and 5 of the Real Estate Act and Order No. 33/2022 dated 5th July 2022, every developer is obligated to update the prescribed statement forms quarterly/annually on the website.

Another crucial aspect is the requirement for developers to open a separate account in a nationalized bank for the project, where 70 percent of the customer funds must be kept. Forms 1, 2, and 3, certified by the Project Engineer, Architect, and Chartered Accountant, need to be submitted to MahaRERA when withdrawing funds for project work. MahaRERA emphasizes the necessity of adhering to these guidelines and highlights them during project registration.

Ajoy Mehta, Chairman of MahaRERA, emphasized the authority’s commitment to securing and protecting customer investments in the housing sector. While some relief is seen in the response to quarterly progress reports in February and March, many projects still fall short of regulatory requirements. MahaRERA remains resolute in taking strict action against such non-compliant projects.