Ajoy Mehta, Chairman of the Maharashtra Real Estate Regulatory Authority (MahaRERA), hangs up his boots this month, leaving behind a much more streamlined and compliant real estate sector. With Mehta wielding the regulatory whip, builders have learnt that homebuyers have the right to expect that their houses are delivered on time, with all the promised amenities.
Right from filing quarterly progress reports (QPRs), delivery timelines, amenities to be provided, separate designated accounts and use of funds, Mehta has relentlessly tightened the grip on a sector, where previously, developers had all the rights and the buyers none. Even real estate agents, who broker deals, have now to pass an exam and be certified.
When Mehta took over in 2021, MahaRERA was still coming to grips with the provisions of the Act. “Earlier, compliance was hardly 4-5 per cent,” Mehta told businessline in an interview. One of the reasons was that MahaRERA did not insist on it. He changed this since the Act mandated it and QPRs became mandatory.
“First we issued notices, compliances increased. Then, we started imposing penalties. Compliance went up further,” Mehta said. Compliance on filing QPRs has risen to over 46 per cent.
Penalties, revoking of registration numbers, freezing of bank accounts have made the real estate sector realise that it is better to comply rather than be in violation. “The cost of non-compliance is much heavier than compliance,” Mehta added. Builders have also to contend with the fact that homebuyers are reluctant to buy from builders who are non-compliant or do not have registration numbers. In July, the authority took action against 628 projects for not displaying RERA registration numbers in their advertisements.
The MahaRERA website has details of all projects, as well as their scheduled timelines for completion. The focus, said Mehta, was on transparency and, therefore, disclosure. “We are not here to prescribe. We cannot replace purchasers’ wisdom with our own. The purchaser’s wisdom is ultimate. All we can do is ensure disclosure.”
Mehta is guided by areas of disputes that occur frequently. For instance, MahaRERA had frequent complaints of parking space not being adequate for the homeowner’s needs or being inconveniently placed for those with disabilities. Regulations now make it mandatory for builders to declare the parking space dimensions and where they are located, and not allotted randomly.
One of the biggest reforms made by MahaRERA has been in ensuring that homebuyers’ money is not frittered away by builders and channelised for other uses. Builders have to open three bank accounts – one for collecting money from buyers, another for depositing 70 per cent of the funds allocated for a project’s land and construction, and a third where the remaining 30 per cent will be deposited. These accounts are protected from attachment by any government agency.
Another major reform has been in ensuring that amenities promised to homebuyers are actually delivered on time. Once they are put in the sale agreement, they become non-negotiable and cannot be changed.
Mehta said builders should be diligent about their commitments and should follow-through on them, whether it is in handing over the houses, or the amenities they agree to provide.