MahaRERA update: New guidelines issued to ensure homebuyers are compensated within 60 days by the developers

MahaRERA has said that the SOP is announced to ensure the strict implementation of the Bombay HC’s orders and also to provide relief to homebuyers

The Maharashtra Real Estate Regulatory Authority (MahaRERA) announced on November 22 that it has formulated a Standard Operating Procedure (SOP) to expedite the recovery of compensation from developers in a time-bound manner for aggrieved homebuyers. The compensation is recovered from the developer due to various defaults.

MahaRERA update: The real estate regulator has said that it has formulated a Standard Operating Procedure (SOP) to expedite the recovery of compensation from developers in a time-bound manner. (Picture for representational purposes only)(Mehul R Thakkar/HT)

This latest SOP is announced to ensure the strict implementation of the Bombay High Court’s orders and also to provide relief to homebuyers. MahaRERA expects the homebuyers to be compensated within 60 days from the order’s date, the MahaRERA statement said.

"Hereafter, for the first time, the case of any developer failing to pay the compensation amount despite sufficient opportunities will be sent to the Principal Civil Court of the respective area for further action. Upon taking this action, the erring builder may face imprisonment for a term of up to 3 months. This provision is expected to immensely help in recovering compensation and providing timely relief to the home buyers," the MahaRERA statement said.

According to the statement, left with no amicable resolution with the developer, homebuyers often approach MahaRERA seeking relief on multiple issues, ranging from failure to receive possession of the apartment by the deadline to sub-standard construction quality, lack of parking, and missing amenities. Such complaints are heard by MahaRERA’s designated Adjudicating Officers, who, in turn, on the merits of the case, order compensation.

Homebuyers to report to MahaRERA within 60 days

As per the SOP, if the homebuyer is not compensated within 60 days, the individual will have to file an application for non-compliance for the recovery of the amount with interest or interest for delayed possession or compensation, as the case may be, according to the MahaRERA statement.

After getting the complaint, MahaRERA shall hear the non-compliance application within 4 weeks from receipt of the same. If it is established prima facie that the developer has failed to comply with the order, a reasonable time will be granted to adhere to the order. Upon the reasonable time period coming to an end, if the developer continues to err, they may be asked to submit an affidavit detailing all movable and immovable assets, bank accounts, and other investments.

Recovery warrant will be sent to the collector

To ensure that the compensation is duly recovered, a Recovery Warrant will be sent to the District Collector concerned to initiate the seizure or attachment of assets and bank accounts, the MahaRERA said.

According to the developer, if the developer fails to provide details of immovable and movable properties, bank accounts, and other investments, the case will be referred to the Principal Civil Court of that area for further action. According to the provisions of the Code of Civil Procedure,defaulting developers may be imprisoned for up to three months.

Legal experts on the new SOP

According to the legal experts, the new SOP represents a positive step, but has its limitations.

"While MahaRERA circular represents a positive step toward creating a structured execution framework in line with judicial directions, it suffers from vague timelines that will extend the disposal timelines for execution applications in comparison to the existing disposal timelines prior to the issuance of this Circular," said, Advocate Sunil M. Kewalramani, proprietor at Sunil M Kewalramani and Associates.

"This Circular’s actual impact will only become clear once MahaRERA implements it effectively and in its true spirit," Kewalramani said.

"The MahaRERA recovery warrant portal currently lacks real-time updates, a system to track warrant status, and key particulars. Warrant data is also not digitally linked to pending appeals or matters where stay orders have been granted. Execution of orders remains the biggest hurdle for allottees; stricter timelines and minimal adjournments are essential," said Trupti Daphtary, a Mumbai-based solicitor.