The Maharashtra Real Estate Regulatory Authority (MahaRERA), established under the Real Estate (Regulation and Development) Act, 2016 (RERA), has revolutionized the real estate sector by introducing transparency, accountability, and efficiency. While MahaRERA provides immense benefits to homebuyers, it also places significant responsibilities on promoters (developers).
This blog explores MahaRERA from a promoter’s perspective, outlining compliance requirements, benefits, and challenges.
Who is a Promoter Under MahaRERA?
A promoter is any person or entity involved in the development, marketing, and sale of real estate projects. This includes:
- Developers.
- Builders.
- Contractors involved in property development.
Key MahaRERA Provisions for Promoters
1. Registration of Projects (Section 3)
Promoters must register their projects with MahaRERA before marketing or selling them.
Key Requirements for Registration:
- Projects exceedingย 500 square metersย or comprising more thanย eight apartmentsย must be registered.
- Provide detailed project information, including:
- Approved layout plans.
- Financial disclosures.
- Timeline for project completion.
- Title ownership documents.
Benefits:
- Builds buyer confidence.
- Legitimizes projects and ensures compliance.
2. Financial Discipline (Section 4)
MahaRERA mandates financial accountability for promoters.
- 70% of project fundsย must be deposited in a dedicated escrow account.
- Funds can only be withdrawn based on project progress, certified by an engineer, architect, and chartered accountant.
Benefits:
- Ensures efficient use of funds.
- Enhances financial transparency, fostering trust.
3. Obligations to Buyers (Section 11)
Promoters are required to adhere to their commitments to buyers, including:
- Providing timely possession.
- Delivering properties as per agreed specifications.
- Addressing structural or quality issues for up toย five yearsย after possession.
Challenges:
- Ensuring on-time delivery while managing unforeseen delays, such as regulatory approvals or labor shortages.
4. Advertisements and Marketing (Section 12)
Promoters must ensure truthful and accurate advertising of their projects.
Whatโs Prohibited?
- Misleading claims about project completion dates or features.
- Marketing unregistered projects.
Penalties for Non-Compliance:
- Compensation to buyers for false advertising.
5. Project Updates and Compliance (Section 13-16)
Promoters must regularly update project details on the MahaRERA portal, including:
- Construction progress.
- Changes to plans or timelines.
Benefits:
- Maintains transparency with buyers.
- Reduces disputes by keeping stakeholders informed.
Penalties for Non-Compliance
MahaRERA imposes strict penalties for non-compliance, such as:
- Finesย for failing to register a project.
- Compensationย to buyers for delays or misleading advertisements.
- In severe cases,ย imprisonmentย for repeated violations.
How to Avoid Penalties:
- Ensure timely registration of projects.
- Maintain transparency in communication with buyers.
- Regularly update project details on the MahaRERA portal.
Benefits of MahaRERA for Promoters
While MahaRERA increases compliance requirements, it also provides several benefits for promoters:
- Enhanced Buyer Confidence: Transparent processes attract more buyers.
- Streamlined Dispute Resolution: Promoters can resolve conflicts efficiently through MahaRERA.
- Level Playing Field: MahaRERA discourages unethical practices, ensuring fair competition.
- Credibility: Registered projects improve a promoterโs reputation in the market.
Challenges Faced by Promoters Under MahaRERA
- Administrative Burden:ย Managing documentation and updates on the portal requires additional resources.
- Financial Constraints:ย Locking funds in an escrow account may create cash flow challenges.
- Delays in Approvals:ย Promoters are held accountable for delays, even when caused by external factors like government approvals.
Best Practices for Promoters Under MahaRERA
- Plan Effectively: Develop realistic timelines and budgets to avoid delays.
- Focus on Quality: Deliver properties as per agreed standards to build trust.
- Stay Transparent: Provide accurate project details and updates to buyers.
- Leverage Technology: Use PropTech tools to streamline compliance and enhance communication.
