MahaRERA sets up dedicated vertical for stalled projects valued over 78,000 crore that need to be revived

In Maharashtra, there are over 4,500 projects that have missed their completion deadline.

Sweety AdimulamUpdated: Wednesday, June 22, 2022, 11:36 PM IST
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MahaRERA sets up dedicated vertical for stalled projects valued over 78,000 crore that need to be revived | Unsplash

The Maharashtra Real Estate Regulatory Authority (MahaRERA), in order to revive the stalled projects, has set up a dedicated vertical under the chairmanship of Sanjay Deshmukh IAS (retired). This vertical will facilitate how the stalled /lapsed project can be started once again. In Maharashtra, there are over 4,500 lapsed /stalled projects. Meaning these projects have missed their completion deadline.

In fact, this dedicated vertical of stalled projects under MahaRERA is on the lines of grievance redressal, administrative mechanism, and complaint resolution verticals. "The stalled project vertical will give a broader idea of how the homebuyers will get back their homes through the provision of various real estate remedies. Such as through intelligent Information technology system, regulatory oversight; meaning whether the funds of a particular real estate project has been used or not; the work of the project is really ongoing among other important aspects," said Ajoy Mehta the Chairman of the MahaRERA.

Mehta was talking about the stalled projects during a panel discussion held on June 22 organised by the Confederation of Real Estate Developers' Associations of India -The Maharashtra Chamber of Housing Industry (CREDAI-MCHI). Mehta explained that over 78,000 crore lapsed projects comprising 4,500 are across the state. The money that has been pumped into these projects has come from homebuyers, banks and other private financial institutions.

As of June 1, 2022, out of the 35,488 projects in the country, 9,304 have been completed and more than 26,000 remain pending which include regular or stalled projects. One of the main reasons for this hold-up has been the unplanned credit backup, issues in the approval mechanism, and the substantial cost escalations in raw material prices which have impacted the margins, according to the real estate stakeholder.

To address the issues of helping revive stalled projects in MMR, there has been a unanimous call for industry stakeholders to come together and collaborate collectively and overcome the existing challenges, stated Boman Irani, President, CREDAI-MCHI. "More than 20% of stalled projects in the country belong to MMR and it is important to complete these to maintain a steady cash inflow. Given the current challenges, it is imperative for all stakeholders to mutually agree to take a hit in the interest of conducting business and if required, to collaborate through joint ventures and other methods for obtaining a common objective. We also propose that the state government provide interim credit support and a special waiver of interest for delay by the allottee,” said, Mr Irani, President, CREDAI-MCHI as he also explained how these projects will close monitoring to avoid deviation from revised timelines.

Additionally, given RERA’s jurisdiction over financial institutions in certain conditions, understanding the need for urgent attention to help in fast-tracking the completion of these projects and reducing the burden off homebuyers, Mehta, Chairman, MahaRERA, stressed, “Stakeholders across the ecosystem – bankers, developers, and bankers – need to come together and mitigate any negative effects to the growth of the ecosystem. Under Section 8 – upon revocation and lapse of the project, we shall take control and shall devise a plan to ensure the completion of the project and have the discretion of the Authority to continue promoting by imposing certain conditions.

Whereas Dr. Vijay Satbir Singh (IAS Retd.), Member, MahaRERA further added that as of next steps, we can share exclusive charge to a member of authority which can help in recovery diverted funds from promoters and help in reviving these stalled projects.”

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