Mahrera Rules

Maharera rules

Government of India has validated the Real Estate Regulation and Development Act 2016 and all the sections of the Act shall come into consideration with effect from May 1, 2017. Under this Act, Government of Maharashtra vide notification dated April 20th, 2017 notified the Maharashtra Real Estate Rules, 2017 and established Maharashtra Real Estate Regulatory Authority MahaRERA, for regulation and encouragement of real estate the sector in the State of Maharashtra.

Maharashtra is the first state to execute the Act with an aim to safeguard homebuyers from any distinction by real estate players Developers. The MahaRERA was entrenched with the aim to permit homebuyers to approach the authority for any failure on part of the Developers.

Some key features of MahaRERA are:

Sale on Carpet area

Before the execution of the MahaRERA, Developers sold property depend on the built-up area which is the carpet area plus the outer walls of the apartment and other common areas. However, after the execution of MahaRERA, Developers have to sell the property depending on the carpet area i.e. area which is surrounded within the four walls of the apartment and eliminate the area of balcony and gallery of the building. This will help customers to pay only the money for the area they will be using.

Definition of Parking Space

The Rules have informed the definition of the Parking space which was not present under the earlier Act or Rules. Now, the Developer requires to reveal the charges for the parking area in the official agreement individually.

Mandate on the Developer

MahaRERA includes various mandates to acquire the safety of the buyers. Some major mandates are:

·        As per the MahaRERA Rules, the Developer has to reveal the land cost, cost of construction, and evaluated cost of the real estate project as needed under the Act. Since the penalty is imposed on the cost of the project this data is important.

·        The responsibility of finishing a project within a specific time frame lies on the real estate Developer, failing which the Developer would face fine and also be sentenced to three years in jail making it a distinct offense.

·        As per the Maharera Rules, the status of ongoing projects requires to be revealed as per the last sanctioned plan and also about the status of development of common areas along with the anticipated period of completion to be revealed.

·        The amounts deposited in different account can be withdrawn by the Developer on the basis of certificate issued by the engineer, architect and CA on the extent of project completed by the estimated cost of the project.

·        Registration the period contains the period where actual work could not be started because of the particular orders from any court of law, Competent Authority, Tribunal, etc. or such circumstances as may be noticeable by the Authority.

·        As per provision of the Maharera Rules, a Developer cannot sell apartments if such The developer has not registered the specific project within 90 days from the date of the notification.

·        The registration of the project is important for the Developer. However, registration of the project may not be needed if the project is for renovation or repair or redevelopment motive and which does not require marketing, advertisement and selling of apartments.

Establishment of Tribunal

To address the grievances of property buyers, the law mandates the implementation of a Maharashtra Regulatory Authority Board as a tribunal. The tribunal will comprehend of the Chief Justice of the High Court, the law and judiciary secretary, and the housing secretary.

Criticism

·        The state rules have a facility for ‘phases of real estate project’. It appears to advise a set of buildings and even a wing of building as a project. While the Act permits for large projects that are spread over 100 acres to be finished in phases, it does not permit for splitting a project into buildings.

·        Maharera rules have a new denotation called ‘proposed plans’ as per the RERA Act notified by the Centre, only sanctioned plans can be proposed and not proposed plans.

·        It also has a facility of ‘last approved sanctioned plan’. RERA clearly states that consent from two-third allottees is needed for changes in approved sanctioned plans shared at the time of booking a house. Considering only the last approved sanctioned plan is a complete indication to legalize all changes made by the promoter in the plan ensuing to booking.

·        MahaRERA also gives elective power to the Authority, to withhold any data or document from uploading on the website for public viewing. RERA does not give for any such power to be given to the Authority. Providing for such discretionary powers fully defeats the aim of the Act.

·        In the absence of express close shops till registration rule, Developers can pursue marketing and sales activities for their ongoing projects till the end of the three-month timeline.

·        The nature of prohibition under MahaRERA only prohibits sales and marketing of unregistered projects, it is secured to conclude that sold-out projects pending grant of possession until the issue of the completion certificate, need not register under MahaRERA.

·        Other than the State rules providing templates of the agreements to sell, RERA as well as most of the State rules do not describe whether re-executing transactions with the existing allottees of ongoing projects are compulsory or not. Therefore, without an express provision, such a need can also be safely presumed to not apply.

MahaRERA is a step towards altering the real estate sector in India, encouraging appreciable transparency, citizen centricity, accountability, and financial discipline.