Understanding MahaRERA Orders and Their Impact on Builders

The Maharashtra Real Estate Regulatory Authority (MahaRERA), operating under the Real Estate (Regulation and Development) Act 2016 (RERA Act 2016), plays a pivotal role in regulating the state's real estate sector. Its primary objective is to protect homebuyers and promote transparency and accountability among developers. MahaRERA issues various orders to achieve these goals, which carry significant legal weight and implications for builders.

Types of MahaRERA Orders Affecting Builders

MahaRERA's adjudicatory powers allow it to issue orders on a wide range of issues. Key areas include:

• Project Delay Compensation: One of the most common grounds for complaints against builders is project delays. RERA Act 2016 §18 mandates that developers must pay compensation to allottees if they fail to complete or hand over possession of the property as per the agreement for sale. MahaRERA frequently orders developers to pay interest for delayed possession, typically at a prescribed rate, or refund the amount paid by the allottee with interest if the allottee chooses to withdraw from the project.
• Quality and Structural Defects: Homebuyers can approach MahaRERA regarding structural defects or other quality issues in the construction. RERA Act 2016 §14(3) holds developers responsible for rectifying such defects reported within five years from the date of handing over possession, without any further charge. MahaRERA orders can direct builders to undertake necessary repairs or compensate homebuyers.
• Adherence to Approved Plans: Developers are legally bound to construct projects as per the sanctioned plans and specifications. Any deviation without the consent of the allottees is a violation. MahaRERA can order builders to revert to approved plans or pay compensation for unauthorised changes.
• Failure to Obtain Occupancy/Completion Certificates: The RERA Act 2016 makes it mandatory for developers to obtain and provide the occupancy certificate (OC) and completion certificate (CC) to buyers. Delays or failure in this regard can lead to MahaRERA orders compelling builders to expedite the process or face penalties.
• Compliance with Booking and Allotment Norms: MahaRERA ensures that builders adhere to fair practices during booking and allotment, including transparency in pricing, agreement for sale execution, and information dissemination. Orders can address issues like unfair terms, non-disclosure, or arbitrary cancellation of bookings.

Implications of Non-Compliance

Builders who fail to comply with MahaRERA orders face serious consequences:

• Penalties: The RERA Act 2016 specifies significant monetary penalties for non-compliance. RERA Act 2016 §63 allows MahaRERA to impose a penalty which may extend up to five percent of the estimated cost of the real estate project for failure to comply with its orders. Repeated non-compliance can lead to higher penalties.
• Project Deregistration: In severe cases of persistent non-compliance or fraudulent practices, MahaRERA has the power to revoke the registration of a project, as per RERA Act 2016 §7. This effectively halts construction and sales, with severe financial and reputational repercussions.
• Recovery of Dues: MahaRERA orders for payment of compensation or refunds are enforceable. If a builder fails to comply, the allottee can apply for recovery of the amount, which can be executed as arrears of land revenue through the district collector.
• Reputational Damage: Non-compliance with MahaRERA orders often leads to adverse publicity, damaging the builder's brand image and trustworthiness in the market.

In essence, MahaRERA orders serve as a critical mechanism for consumer protection and regulatory oversight, ensuring that developers operate within the legal framework established by the RERA Act 2016.