INDIA: The Maharashtra Real Estate Regulatory Authority (MahaRERA) has served a second show cause notice to over 16,0000 defaulting developers who have failed to provide details of their pending housing projects, despite earlier notice, and has warned to take disciplinary action.
Nearly 16,000 out of the 19,500 registered projects have not responded to a show cause notice served in January, seeking relevant information about their projects and their progress.
The Authority has warned the developers that action in terms of penalties will be taken against the project if they do not respond to the second show cause notice within the next 15 days.
MahaRERA has powers to impose 5 to 10% of the total project cost as penalty. The promoters will be responsible for risk, cost, and consequences if they fail to furnish required information about their projects.
But the MahaRERA official did not disclose the names of 16,500 defaulting promoters to the media to “protect homebuyers and the interests of the developers.”
As per Section 11 of the Real Estate (Regulation and Development) Act, 2016 (RERA), it is mandatory for promoters of ongoing projects to update their registration information, including about construction progress, number of bookings, use of funds, etc., every quarter and provide six-monthly audit reports to the authority. However, a substantial number of developers have not responded.
The authority had set up a close monitoring mechanism and appointed a retired IAS officer as the nodal officer to review projects registered from its inception in May 2017 to March 2022. The exercise revealed that several projects had lapsed and not renewed their registration.
The authority also issued notices to 261 projects, including more than half in Mumbai and Thane, that have less than 40 percent of their work completed but have December 2023 completion dates. The Authority has sought to know how these projects propose to be completed on time.
There are 5,756 stalled projects in Maharashtra. Seventy percent of the work on the 1882 projects has been completed, yet they are delayed for different reasons. Of the 1882 projects, only 624 are registered with the Subregistrar’s Office (SRO).
In Mumbai, there are 380 slum redevelopment projects that are stuck. They include around 20 SRA projects at different locations that are stuck since the Enforcement Directorate (ED) is investigating the developers and has asked to maintain the status quo on work.
The Slum Redevelopment Authority (SRA) has issued stop-work notices to 20 projects based on ED’s request since some of the developers are facing action under the Prevention of Money Laundering Act 2002. As such, the Maharashtra government has urged the Union government to direct ED to allow work to resume on these projects.
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