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The Maharashtra Real Estate Regulatory Authority (MahaRERA) is set to become the first authority in India to introduce grading of real estate projects. Projects will be allotted a grade based on information uploaded by the developer on the MahaRERA portal. The grading system will encompass technical, legal, financial, and general features of the project and will be available for the general public to view. A grading matrix will be released twice every financial year.
MahaRERA is scheduled to begin implementation from October 1, 2023, for the quarter ending March 2024. The process of grading will commence once the due date for the builder to update the project’s quarterly progress report (QPR) on April 20, 2024, has passed. This is only the first phase of the grading matrix, with the following to be released in a staggered manner. MahaRERA is looking to eventually introduce a grading matrix for promoters as well.
The MahaRERA authority’s decision to introduce a grading system comes from a directive issued by the Bombay High Court in February this year. While hearing a petition regarding a transit rent issue of a stalled redevelopment project, justices Gautham Patel and Neela Gokhale recommended to the state government that the MahaRERA authority be put in-charge of identifying, classifying, and rating developers based on a defined matrix. The court gave the authority full discretion to do so with the goal of minimizing buyer’s risk.
In the same month, MahaRERA launched a counselling center offering online and offline in-person sessions at their BKC office in Mumbai to assist homebuyers in retrieving information about the project progress, filing complaints, and seeking redressal. The counsellors present were also trained to help developers clarify their issues regarding the regulatory requirements as mandated by the RERA Act 2016.
In addition to this, MahaRERA issued an order in February 2023 officially permitting developers to de-register their real estate projects. The authority issued a issued a list of several grounds upon which the developer can opt to de-register the project including lack of cash, economically unviable projects, lawsuits filed, disputes and changes in government planning. The circular mandated that the project must ideally not have any allottees, however if it does then de-registration will only be taken into consideration if the developer has resolved all the rights and claims.
In April 2023, the MahaRERA authority initiated the use of QR codes on d developers’ registration certificates to enable homebuyers to access vital project information, view lodged complaints against the builder and access other such vital information quickly. Later in August the authority issued a directive mandating the use of QR codes in advertisements and social media displays for registered housing projects. They did so with the aim to provide easy access to crucial project information such as commencement and completion dates, complaints, approvals procured and more.
In May 2023, MahaRERA set a historic precedent by conducting its maiden certification exam for real estate agents. MahaRERA currently has approximately 39,000 registered agents, of which 457 agents completed their training and around 423 brokers sat for the maiden exam in May. The authority has issued a deadline of September 1, 2023 for the remaining agents to complete their certification to be allowed to continue their practice in the state.
Another significant move, MahaRERA announced it would only register new real estate projects after verifying the commencement certificate issued by the local panning authorities. This was in response to the Kalyan Dombivli scam that involved the use of counterfeit documents to procure MahaRERA registration certificates. Local authorities were given until June 19 to integrate their websites with MahaRERA or send independent emails regarding project registrations.
In August this year, MahaRERA enlisted the expertise of a real estate intelligence agency to boost real-time monitoring of ongoing projects, especially those showing signs of financial stress or not meeting regulatory criteria. It also made it mandatory for realty developers to establish grievance redressal cells within their projects to address homebuyer complaints. The authority announced that compliance to this directive would be a significant criterion in its grading and evaluation system.
MahaRERA has been a front runner of formidable and forward-thinking initiatives aimed as assisting buyers in accessing important information as well as helping developers adhere to the regulatory requirements of the RERA Act 2016. It currently leads the pack in India in terms of effective implementation of the RERA Act 2016, grievance redressal and holding builders and developers accountable for violations.
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