Maharashtra faces a real estate crisis as 33% of active projects lapse due to RERA non-compliance | Representational Image
Mumbai: Maharashtra is facing a significant challenge in the real estate sector as approximately 10,700 out of 32,000 active projects have lapsed. This alarming statistic indicates that 33% of the projects are unable to meet their Real Estate Regulatory Authority (RERA) timelines, with developers failing to upload Form 4 along with the Occupancy Certificate (OC).
Lapsed projects are those for which the RERA timeline has expired without the necessary compliance, leading to considerable concern among stakeholders. This issue is compounded by numerous stalled and non-active projects that, while not lapsed, remain inactive, further aggravating the situation.
Adv Vinod Sampat, President of the Cooperative Societies Users Association, voiced his concerns, emphasizing the need for stricter RERA laws. “The necessity of the hour is to enforce stringent regulations. Builders who commit offenses should face non-bailable charges. Each construction site must clearly outline the proposed stages of work,” said Sampat.
He further suggested that no occupancy licenses should be issued until the building receives a completion certificate. Additionally, builders should be restricted from selling 10% of the constructed area until they hand over possession of the flats and obtain the completion certificate. Sampat believes this precaution would mitigate many of the issues currently plaguing builders.
“Since its inception, RERA has favoured builders. This bias needs to be corrected with a fresh approach. Why should flat purchasers be compensated at just 9%, and have to run from one office to another for time, duty, and registration?” questioned Sampat. He advocated for a policy where no new flats should be sold until the builder clears all past liabilities as ordered by the court, thereby preventing builders from evading responsibilities.
Sampat also criticized the current RERA laws, describing them as a “paper tiger.” He cited numerous instances where RERA failed to monitor and control builders effectively.
The growing number of lapsed projects is a clear indicator that MahaRERA must address these concerns promptly. The current scenario not only undermines buyer confidence but also disrupts the real estate market’s stability. As stakeholders call for more stringent regulations and better enforcement, it remains to be seen how MahaRERA will respond to these pressing challenges.
Stating that Maharashtra continues to lead the nation in RERA registrations, with over 32,000 active projects and 29,000 registered real estate agents, highlighting the sector’s strong commitment to compliance and transparency, Domnic Romell, President, CREDAI-MCHI said, “Despite challenges, over 67% of these projects remain compliant, showcasing the developers’ dedication to regulatory requirements. However, the fact that 10,700 projects have lapsed demands closer scrutiny. This 33% lapse rate reflects systemic challenges rather than an unwillingness to adhere to timelines, necessitating collaborative efforts by developers and the government to address these issues in the best interests of homebuyers.”
Dhaval Ajmera, Secretary, CREDAI-MCHI added, “Providing clear guidance and addressing these procedural hurdles can significantly reduce the number of lapsed projects currently reflected on the MahaRERA website. Additionally, developers face rising construction costs, inflation, delays in approvals, and GST-related issues, such as the unavailability of input tax credit for real estate projects, which add to the difficulties of maintaining compliance.”
“As an industry body, CREDAI-MCHI is committed to fostering meaningful dialogue between developers and RERA authorities to address these challenges effectively. We advocate for a pragmatic approach, including recognizing certain hurdles as force majeure under RERA guidelines. Such measures will not only help reduce project lapses but also strengthen the long-term health and sustainable growth of Maharashtra’s real estate sector,” Raajesh Prajapati, Founder President, CREDAI-MCHI, Raigad said.
