Consumer Connect: 'MOFA Amendment Must Be Junked To Shield Homebuyers,' Says Expert

Q. I understand that last week the Maharashtra government amended MOFA to allow deemed conveyance for projects registered under MahaRERA. Since the RERA Act does not provide for deemed conveyance, such an amendment, which should benefit housing societies, ought to have been welcomed by Mumbai Grahak Panchayat (MGP), headed by you. I was therefore surprised to read that you have strongly criticised and opposed this amendment. Can you explain why MGP is opposing a move aimed at benefitting hundreds of housing societies in Mumbai and elsewhere in the state? – Ninad Sule, Santa Cruz (West) A.

I am not sure whether you have gone through the MOFA amendment Bill recently passed by both houses of the state legislature. On the face of it, the amendment is projected as one meant to allow deemed conveyance for projects registered under MahaRERA. Frankly, no such amendment was required at all. Although the RERA Act does not provide for deemed conveyance, Rule 9(4) of the MahaRERA Rules specifically permits deemed conveyance under Section 11(3) of MOFA for MahaRERAregistered projects. To the best of my knowledge, no court has passed any adverse ruling against deemed conveyance granted to MahaRERA-registered projects, nor does any provision of MOFA prevent the competent authority from granting it.

In my opinion, therefore, this amendment is unwarranted, unnecessary and uncalled for. Let us now look at the actual amendment. The MOFA amendment Bill introduces Section 1A in MOFA, 1963, which states: “This Act shall not apply to real estate projects to which the RERA, 2016 is applicable, except Sections 5A, 11A, 13B, 13C, 13D and other provisions relating to the competent authority.” In effect, except for deemed conveyance and limited related provisions, all other provisions of MOFA will no longer apply to promoters whose projects are registered with MahaRERA.

This exclusion includes sections 13(1), (2), (3), (4) and (5) of MOFA. It is important to note that sections 13(1), (2) and (3) of MOFA provide for imprisonment ranging from six months to five years if a promoter is found guilty of offences such as fraud, cheating or criminal breach of trust against homebuyers. Sections 13(4), (5) and (6) empower the competent authority to disqualify such convicted builders from undertaking construction activity for five years. The most objectionable aspect is that this amendment is being brought with retrospective effect from May 1, 2016, when the RERA Act partially came into force.

As a result, offences committed by MahaRERA-registered builders since that date would now stand condoned. This is shocking and unacceptable. By virtue of section 1A, the scope of MOFA is drastically curtailed and limited only to projects with plot areas not exceeding 500 square metres and not more than eight flats, which are outside the purview of RERA. All larger projects, which are mandatorily required to be registered with MahaRERA, are effectively excluded from the criminal liabilities imposed on builders under MOFA.

The only exception is that these projects will continue to be entitled to deemed conveyance under Section 11(3), for which Section 11A is introduced. As stated earlier, even this amendment was unnecessary. The unfair and unjust outcome is that builders of small projects will continue to face imprisonment and disqualification for fraud and cheating, while large MahaRERA-registered builders are allowed to escape criminal liability altogether – retrospectively. This amendment, clearly driven by the builders’ lobby, exposes an ugly nexus between builders, politicians and bureaucracy, sacrificing homebuyers’ interests. That is why MGP is strongly opposing this amendment and will continue its fight until it is junked.

(Advocate Shirish V Deshpande is chairman, Mumbai Grahak Panchayat. Queries can be sent to him on email: shirish50@yahoo.com)

Published on: Monday, December 22, 2025, 10:24 AM IST