MOFA Amendments Trigger Consumer Backlash Over Diluted Buyer Protections

Mumbai: Recent amendments to the Maharashtra Ownership of Flats (MOFA) Act have triggered strong opposition from consumer bodies, which warn that the changes significantly weaken protections for homebuyers and reduce accountability for errant builders.

The Akhil Bharatiya Grahak Panchayat has urged Chief Minister Devendra Fadnavis to withdraw the amendments, describing them as unjust, anti-consumer and against public interest. The organisation has called for strict enforcement of the original MOFA provisions and restoration of safeguards that ensured criminal liability for violations.

According to the consumer body, the amendments effectively grant what it terms “legal immunity” to builders by removing penal consequences for offences that earlier attracted imprisonment, fines and criminal prosecution.

“The govt has removed the fear of law by neutralising penal provisions. Builders who violate agreements, abandon projects or extort money from buyers are immune to any legal action with the changes,” Grahak Panchayat officebearer Vijay Sagar told TOI.

In a detailed memorandum submitted to the chief minister on December 31, the organisation warned that the amendments undermine MOFA’s core objective of protecting flat purchasers and could lead to large-scale injustice for homebuyers across Maharashtra.

The memorandum pointed out that nearly 10 key provisions of MOFA that earlier provided for imprisonment, fines and criminal prosecution have been deleted. These include Section 13(1), which prescribed up to three years of imprisonment or fines for violations of Sections 3, 4, 5, 10 and 11; Section 11, which mandated builders to convey land and buildings to housing societies or flat purchasers’ associations; and Section 14, which fixed criminal liability on company directors, partners and managers.
Consumer groups said several buyer protection measures have now been rendered ineffective. These include timely possession after the issuance of an occupation certificate, compulsory display of sanctioned plans at construction sites, disclosure of complete project information, execution and registration of sale agreements after accepting not more than 20% of the flat cost, maintenance of buyers’ advance payments in separate bank accounts, construction strictly as per sanctioned plans, applying for society formation within three months, and executing conveyance within four months of society registration.

The Grahak Panchayat has demanded that police and competent authorities be directed to initiate criminal action against defaulting builders and restore ownership and conveyance rights to homebuyers across Maharashtra.

The memorandum also referred to the government’s stated intent to facilitate redevelopment but cautioned against weakening buyer safeguards in the process.
“Many of the residential structures and chawls (tenements) on these lands are old and unsafe, and redevelopment is urgently needed. The government has decided to amend the rules to encourage redevelopment. A (proposed) amendment under section 37(1)(ka) of the MRTP Act (Maharashtra Regional and Town Planning Act, 1966) has been approved and a notification will be issued,” the memorandum noted.

Consumer bodies argue that while reforms may be necessary to streamline processes and support redevelopment, diluting accountability under MOFA risks emboldening errant developers and further eroding buyer confidence at a time when trust in the housing market remains fragile.
They have called on the state government to reconsider the amendments and restore the original intent of MOFA — to safeguard homebuyers and ensure transparency, accountability and fair practices in the real estate sector.