MUMBAI: MahaRERA has issued show-cause notices to 9,177 housing projects in Maharashtra and imposed more than Rs 15 crore in penalties for not submitting their quarterly progress reports (QPRs). This has prompted concerns regarding the regulator’s capability to examine the disclosures made by developers and ensure adherence to the Real Estate (Regulation and Development) Act, 2016 (RERA).
Lawyers and housing activists argue that MahaRERA lacks sufficient infrastructure to systematically verify the self-declarations and documents provided by promoters. They recommend implementing random inspections, independent verifications, and technology-enhanced monitoring, such as AI, to ensure compliance. According to them, current scrutiny remains largely reactive, arising mainly from complaints from homebuyers or other stakeholders.
MahaRERA officials assert that verifying each submission from developers is impractical, given the near 54,000 registered projects in the state. They emphasize the authority’s main goal is grievance redressal and expediting relief for homebuyers. Complaints are reportedly being resolved within 15 days to a month due to new measures introduced.
Legal experts highlight that although MahaRERA checks certain documents during project registration, there is little clarity on whether subsequent disclosures from promoters are routinely verified. The authority began scrutinizing commencement certificates following revelations that some developers in the Kalyan-Dombivli area used forged documents for project registrations. Notably, allottees for a project in Santacruz discovered that the project’s progress had not been updated on the MahaRERA portal since 2024.
Shirish Deshpande, chairman of Mumbai Grahak Panchayat, noted that under RERA, once 51% of flats are booked, developers must enable the formation of a homebuyers’ society and execute conveyance in favor of the society within three months after obtaining an Occupation Certificate.
Deshpande inquired whether MahaRERA has penalized developers who fail to adhere to these requirements, also questioning how many developers accomplish conveyance within the specified timeframe. He emphasized that, under the model agreement, developers are obligated to pay interest for delays. “Why aren’t these payments automatically initiated when delays occur? MahaRERA should employ technology to ensure automatic interest payments for every month of delay, which would significantly lessen the backlog of complaints,” he said.
Advocate Nilesh Gala pointed out that recurring compliance issues reflect a structural weakness in RERA’s fund protection framework. Section 4(2)(l)(D) of the Act mandates that 70% of the money collected from homebuyers must be deposited in a designated project account, accessed only against certifications from an architect, engineer, and chartered accountant about project progress. However, Gala emphasized that the chartered accountant’s Form 3 certificate relies on information from the promoter and lacks independent verification, thereby allowing the risk of funds being withdrawn without matching construction progress.
Gala cited a case involving a Chembur project, where homebuyers collectively invested around Rs 800 crore, underscoring the risks of insufficient oversight. He proposed that MahaRERA should have a sample of Form 3 certifications independently audited by empaneled chartered accountants rather than accepting them blindly. Furthermore, he suggested that escrow account banks should only release funds after verifying completion percentages with architect and engineer reports, rather than solely following the promoter’s instructions. Accordingly, reconciling funds withdrawn from designated accounts with quarterly updates on the RERA portal should be implemented, raising flags when financial withdrawals do not correlate with physical progress. He asserted that professionals issuing false certifications must face penalties, including blacklisting and referral to regulating bodies.
RTI activist Jeetendra Ghadge, who faced denial of information concerning discrepancies in Form 3 certificates and violations of designated bank provisions, also demanded thorough verification of disclosures by developers.
Advocate Godfrey Pimenta, representing allottees of a Vakola project not updated on the MahaRERA portal since May 2024, emphasized that promoters must upload architects’ certificates, engineers’ certificates, chartered accountants’ certificates, progress reports, financial disclosures, and other pertinent information regularly as stipulated by Section 11 of the Act and related MahaRERA regulations.
Though Pimenta welcomed MahaRERA’s recent compliance drive against projects neglecting mandatory disclosures, he stressed that disclosures alone do not ensure accuracy, leaving homebuyers and stakeholders without independent verification of the status and financial progress. He called for the introduction of random inspections and verification systems to reconcile disclosures against actual progress, supported by AI monitoring tools.
Advocate Avinash Pawar claimed that MahaRERA’s compliance primarily consists of self-declarations from promoters, which cannot ensure contract adherence with flat purchasers.
Advocate Anil D’Souza noted that RERA imposes various compliance obligations, including quarterly and annual reports and disclosures regarding project progress. He suggested that tighter regulation may be necessary while acknowledging that the current MahaRERA administration has tightened scrutiny of project registrations.
MahaRERA officials, defending their position, stated that their primary role is to oversee the sector and assist homebuyers with grievances rather than conducting constant micro-management of each project. They assert that the authority lacks the resources and mandate for comprehensive, ongoing examinations of all real estate projects in the state.
