Maharashtra RERA Freezes Bank Accounts of Over 1,950 Stalled Real Estate Projects

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has intensified its crackdown on real estate developers responsible for stalled or lapsed projects by freezing the bank accounts of over 1,950 such ventures.

This decisive action is aimed at enforcing accountability among developers while protecting the interests of homebuyers who have been impacted by delayed or incomplete projects.

By focusing on ventures that failed to meet regulatory requirements or their promised commitments, MahaRERA seeks to uphold compliance with real estate regulations and address long-standing challenges in the sector.

The housing regulator issued show-cause notices to the developers of projects that failed to provide updates on their status, despite their completion deadlines having already passed.

These developers were given a 30-day window to comply and update the necessary details with MahaRERA. Explaining the rationale behind the move, MahaRERA Chairman Manoj Saunik emphasized the importance of adhering to the Real Estate (Regulation and Development) Act, 2016, which was introduced to ensure transparency, accountability, and financial discipline in the real estate sector.

He stated that the primary objective of the Act is to safeguard homebuyers’ interests by mandating regular updates from developers about project progress.

This information is required to be periodically uploaded on MahaRERA’s website—quarterly and annually—ensuring homebuyers are consistently informed. However, compliance with these requirements has been less than satisfactory.

In January 2023, a Compliance Cell review revealed that only three out of 748 projects had updated their details on MahaRERA’s portal. This glaring gap in compliance prompted the regulator to take stringent action.

Following follow-ups and the issuance of show-cause notices, developers began responding. Out of 10,773 lapsed housing projects served with notices, 5,324 developers provided the necessary responses.

Of these, 3,517 projects successfully submitted their Occupancy Certificates (OC), while 524 developers applied for extensions of their project deadlines. Responses from 1,283 projects are still under scrutiny.

However, 3,499 projects remain unresponsive, and MahaRERA has initiated similar actions against these ventures.
To address non-compliance, MahaRERA has placed 1,950 projects in abeyance, effectively freezing their registrations and restricting all transactions related to these ventures.

This measure ensures that developers cannot conduct financial activities until they resolve their regulatory issues. Additionally, the regulator is taking steps to identify and act against the remaining non-compliant projects.

Under the regulatory framework, developers are required to specify their proposed project completion date at the time of registering with MahaRERA.

Upon completion, they are mandated to submit Form 4, along with the Occupancy Certificate, or apply for an extension in case of delays. Developers facing significant challenges are expected to apply for de-registration.

Furthermore, promoters must submit quarterly and annual progress reports on MahaRERA’s website within the specified timelines, accompanied by all necessary supporting documents.

These measures aim to maintain transparency and accountability while ensuring that homebuyers have access to accurate and up-to-date information about their investments.

MahaRERA has also decided to take strict action against developers who fail to comply with these regulations. This includes canceling or suspending project registrations, imposing penalties, and directing Joint District Registrars to halt property registrations for the affected projects.

Chairman Manoj Saunik acknowledged the significant number of non-compliant projects but reassured that MahaRERA is actively working to protect homebuyers’ interests.

The regulator remains committed to ensuring that developers adhere to their obligations and that the principles of the Real Estate (Regulation and Development) Act, 2016, are upheld.

This crackdown by MahaRERA highlights its determination to bring about greater transparency, accountability, and discipline in the real estate sector.

By freezing the bank accounts of stalled projects and implementing stringent measures against defaulters, MahaRERA has sent a clear message to developers while providing much-needed reassurance to homebuyers that their investments are being safeguarded.