The Maharashtra Real Estate Regulatory Authority (MahaRERA) has decided that the Self Regulatory Organisations attached to it should step in to mediate to revive lapsed housing projects in the state. Recently, a meeting was held among the MahaRERA officials and Self Regulatory Organisations representatives on what measures can be taken to ensure home buyers' interests stay protected.
There are six Self Regulatory Organisations recognised by MahaRERA, namely, NAREDCO West Foundation, CREDAI-MCHI, CREDAI Maharashtra, Builders Association of India, Marathi Bandhkam Vyavsayik Association and Brihanmumbai Developers Association. There will be six conciliation groups from each of the Self Regulatory Organisations.
Over 5,000 projects in Maharashtra lapsed; 309 in Mumbai, MMR region
In Maharashtra, there are a total of 5,756 lapsed projects. Of these 5,756 projects, 624 of them are registered with the six self Regulatory Organisations as the developers are part of the trade associations. Of the total lot, 1,882 projects are the ones wherein 70% of construction work is through and stuck.
Sources within MahaRERA shared that as part of the initial attempt to revive the lapsed projects, details of 624 projects will be shared with Self Regulatory Organisations. It includes 309 projects from Mumbai, Thane, Palghar and Raigad, 220 in Pune, 41 in Nashik, 20 in Nagpur, 29 in Aurangabad, and 5 in Amravati.
“These regulatory bodies have agreed to help with the rest of the projects even if the developers or the projects are not part of the trade associations. Such unregistered builders or projects will be taken up in the subsequent phase,” said the official.
MahaRERA divides residential projects into 4 groups to resolve issues
To revive these stalled projects, MahaRERA has divided the residential projects into four groups based on their construction status. The first group comprises projects that can be completed without compromising the rights of home buyers.
The second group will include projects where there is a need for reconciliation between developers and home buyers. The third group would be projects requiring MahaRERA’s intervention due to some difficulties in terms of local authorities or lending financial institutions. The last or fourth group will consist of projects where the developer is missing and the home buyers can complete the project by replacing the builder.
Self Regulatory Bodies to appoint senior, experienced members as heads of conciliation groups
Considering the expertise required to resolve the complexities involved in real estate projects, the self-regulatory bodies will have to appoint experienced and senior members as heads of the conciliation groups for this purpose. These may include architects, financial institutions, concerned developers, housing associations or home buyers and conciliators.
As a sizable portion of the residential projects are stuck due to the realtor becoming financially stressed, in November 2019, SBICap Ventures launched a dedicated fund for stressed projects – Special Window for Affordable and Mid-Incoming Housing (SWAMIH). This fund provided last-mile funding to projects that are closer to completion and has profitability potential. Despite such a fund, a substantial chunkof projects continue to languish leaving homebuyers in the lurch.
