A law aiming to empower home buyers in cases of delayed residential projects by builders is in the final stages of its passing by Maharashtra Real Estate Regulatory Authority (MahaRERA). The proposed law will enable home buyers a Standard operating procedure (SOP) under which they will have the authority to remove a builder from a private residential project, if he fails to complete the project on time.
MahaRERA is aware of at least 20 such cases at present which relates to complaints against builder for non-completion of project by promised dates. With a view to effectively take some steps in this regard, MahaRERA has decided to frame guidelines under Section 7 of the RERA Act under which a society can take action against the builder if they have consent of 51 per cent or more members. The society will have the power to remove builder from the project.
New guidelines regarding this law will be issued soon by MahaRERA. However, the law will apply to will apply to projects that are free of litigation before any other fora. “When a homebuyer purchases a flat in any private apartment, then after receiving 10 percent of the flat value from the buyer, the builder has to register the flat sale agreement. As per RERA regulations, if more than half the flats are sold in any project, a society or an association of the flat owners has to be formed. Once the association or society is formed and majority of the members conclude that the builder won’t be able to complete the project on time, they can file a complaint in the name of the society and the builder can be removed from the project,” MahaRERA secretary Vasant Prabhu told The Indian Express.
“According to the RERA guidelines, the money used in under-construction projects is from homebuyers and lenders (Banks or financial institutions). Under Section 8 of the RERA Act, if the builder is pulled out of the project, the first opportunity of completing the project will be accorded to the society formed by the flat purchasers,” Prabhu further said.