MahaRERA circular 50/2025: easing cancellation issues, but some gaps remain

MahaRERA’s Circular 50/2025 is an important step to solve a common problem in real estate projects—cancellations getting stuck due to non-cooperative buyers.

Earlier, even if a developer followed the legal process—issued notice under Section 11(5) of RERA and got an order for cancellation—the process could not move ahead if the allottee refused to sign. Because of this, the Agreement for Sale remained active, and the unit stayed legally blocked. This created financial pressure, especially in projects where cash flow is already tight.

In October 2025, the Bombay High Court gave clarity on this issue. It said that while cancellation cannot be done unilaterally, MahaRERA can appoint a “fit and proper person” to sign and register the cancellation deed on behalf of the defaulting allottee. Once done, the Sub-Registrar must register it.

Based on this, MahaRERA issued Circular No. 50/2025 dated 18 November 2025. The circular provides a clear process—if the allottee does not comply, MahaRERA can appoint an officer to execute and register the document. This rule also applies to pending cases.

This change helps developers unlock stuck units and improve project cash flow, as they are no longer dependent on the allottee’s cooperation.

However, some important issues are still not addressed.

The circular does not clearly explain what happens to the money already paid by the allottee or the stamp duty involved. It also does not deal properly with cases where the allottee has a genuine complaint, like delay or poor quality. In such situations, allowing cancellation without resolving the dispute may create an unfair situation.

Another concern is whether this rule should apply only in clear default cases or also in disputed cases. This will become clearer as more cases are decided.

Insight

This circular makes the cancellation process faster and more practical. It removes delays caused by non-cooperation and gives more control to the authority.

But speed alone is not enough. The system also needs to ensure fairness. If genuine buyer concerns are ignored, it may create new disputes instead of solving old ones.

The real success of this circular will depend on how carefully and fairly it is used in practice.

By Sana Khan
Executive Editor, Realty Quarter
Mumbai