In India, real estate was always a state subject. The Real Estate Regulatory Authority (RERA) is a nodal central act which has been adapted by each state to suit its needs. Each state has a unique state-level RERA Act, which governs all the registered real estate participants and defines the rules and regulations that govern real estate transactions in the state. In this article, we will specifically look at the RERA Act unique to the state of Maharashtra, also known as the MAHARERA Act. The bottom line is that all under-construction realty projects in a state have to be RERA approved and must abide by the basic rules and regulations for the same. Just for the records, the RERA Act has been in force since May 2017 and has ushered transparency in real estate transactions.
What is MAHARERA and how it works
MAHARERA is the body that governs real estate sector in the state of Maharashtra, but also extends to adjoining union territories. The intent of the MAHARERA can be roughly encapsulated as under -
- The MAHARERA offers a digital cum physical platform for real estate projects and real estate agents (facilitating sale and lease of properties in Maharashtra) to get registered.
- The MAHARERA Act basically applies to all flats, plots, and buildings under construction. However, a recent ruling by the UP Appellate Tribunal has held that the RERA Act of any state will also automatically extend to disputes of non-registered projects.
- The MAHARERA Act aims to protect the interests of the home buyers, allottees, real estate agents in the entire sale/lease process and those who are involved in real estate transactions. The MAHARERA monitors progress on completion of realty projects.
- MAHARERA has its own appellate tribunal for speedy and satisfactory resolution of various disputes pertaining to real estate transactions.
- Under MAHARERA, registration is mandatory for all residential and commercial projects. In fact, the MAHARERA Act specifically bars unregistered real estate developers from advertising, booking or selling any real estate project.
- Registering under MAHARERA is quite simple. Whether you are a promoter, developer, or real estate agent or complainant; you have to first register at the link: https://maharerait.mahaonline.gov.in/website where you can also submit documents.
MAHARERA handles relevant real estate related registrations related to the state of Maharashtra and union territories of Dadra and Nagar Haveli, and Daman & Diu.
What are the benefits proffered by MAHARERA
Today, a RERA registration is not just a stamp of authenticity, but also puts pressure on builders and developers to expedite completion and handover of real estate projects; both residential and commercial. While the RERA Act is just about 6 years old, it is already making a mark and emerging as the future of how realty transactions are done in India. Here are some of the major merits of MAHARERA to the various stakeholders and for real estate projects being RERA approved.
- MAHARERA brings a high level of transparency in the real estate sector, a sector known for long to be in the news for the wrong reasons. Issues like quality of builders, quality of real estate agents, timely completion of projects, grievance redressal mechanism are all parts of this shift to RERA. No longer, are the buyers of property left at the mercy of real estate developers. In the past, we’ve had regular complaints about random delays in projects, time overruns, cost overruns, additional loading etc. All these are addressed and the process flow standardized for the benefit of the end customer. Under RERA, the builders and developers have to make disclosure of all relevant details pertaining to the property and cannot make promises just to market the project. They will be held accountable for such promises. Developers have to mandatorily adhere to registration of the project with RERA. In addition, they must also update the RERA on project progress and explain delays. RERA has also prescribed stringent penalties.
- MAHARERA offers a proper framework that regulates by checking the background of project developers, grades them on quality, monitors fund usage etc. It also prescribes explicitly that the down payment to builder cannot exceed 10%.
- The MAHARERA also demands more accountability from the builders. For instance, under the MAHARERA, the developers have to deposit 70% of all funds paid towards a particular project into an escrow account, which can only be used for construction or cost of land. In addition, the developers must also periodically report progress on the project to MAHARERA.
- The outcome of such a regulated approach is that it enhances the trust and confidence of realty customers. Perhaps, the greatest benefit that customers have is the reinforced trust in the real estate sector. That is worth its weight in gold.
With the RERA approved status tag, realty projects finally have a regulatory framework to rely on and customers a regulator to fall back upon.