Real Estate

MahaRERA sets up panels to revive stuck realty projects

Varun Aggarwal Mumbai | Updated on July 30, 2019 Published on July 30, 2019

MahaRERA ordered seizure and auction of 253 properties of builders to refund flat buyers who are yet to receive possession. Representative image

Move will ensure buyers get what they paid for without taking huge haircuts

With an aim to get real estate projects completed on time and ensure that buyers get what they paid for, the Maharashtra RERA has set up resolution panels.

“We have created resolution panels under MahaRERA, which is unique to Maharashtra. This panel has a consumer representative and a developer representative. This panel will interact with banks, home buyers and builders who could potentially take over the project to complete it on time,” Gautam Chatterjee, Chairman of MahaRERA, told BusinessLine.

Earlier this month, MahaRERA ordered seizure and auction of 253 properties of builders to refund flat buyers who are yet to receive possession. All of these were cases where buyers saw real estate value of their flats going down and wanted to take advantage of the RERA provision that allowed them to exit the project with their investment along with interest amount.

While the proposed auction will be held under IBC rules, Chatterjee said that it would involve everyone taking hair cuts and hence it would be prudent to resolve the issue under the RERA provisions.

“In all these 253 cases, the buyers were trying to exit the project, derailing the entire process because the builder had no funds to complete the project. But the buyers need to understand that by going through auction, they’ll have to take a huge haircut on their investment and it will be a long drawn out process,” Chatterjee said.

Instead of one or two buyers deciding the fate of a project, MahaRERA is now trying to ensure that all allottees of the project get together and take a decision on it.

“In Section 7 cases, we have to work out a blueprint to see how the project can get completed, where will the money come from and where is the gap. Once we get the blueprint, we try to tell the buyers that ultimately you have to meet that gap. We tell them first focus on getting your home by meeting that funding gap, and then whatever extra money you spent, RERA will look at whether there are unsold flats in the project that can be auctioned through the collector and the money paid to the buyers,” Chatterjee said.

MahaRERA is also separating the project from the recovery process when the collector tries to seize the property of the builders.

“We specifically tell the collectors what properties they can attach. We ensure that the ongoing project is kept out of that so that there is no disruption. The collector can go ahead and auction the head office of the builder to collect the dues, if required.

“But by detaching the project from the auction process, we ensure that people get the flats they paid for and the project is taken to completion,” Chatterjee said.

RERA will also work with project financiers, building experts and others to ensure the projects are finished on time.

Chatterjee said the MahaRERA has already helped two buyer groups to complete a project by getting a new builder. It also roped in experts to ensure the project is completed within a deadline, with clear transparency on the costs.

“I feel the prime objective of the RERA Act is to ensure the completion of projects, because only the completion of a real estate project will bring relief to all the stakeholders, including the homebuyers, institutional finance companies and all others associated with the project,” Chatterjee added.

Published on July 30, 2019
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