Maharashtra RERA chairman Ajoy Mehta has urged real estate developers to buckle up on the compliance front or face the prospect of regulatory oversight, days after the regulatory body issued notices to 16,000 projects for failing to update key compliance information such as sales, fund utilisation and completion status.
The notices were sent after ‘show cause’ notices were first issued in January. Defaulting developers could stand to be fined 5 to 10 percent of their total project cost, in keeping with RERA laws.
“Please ensure you are keeping your compliances in place,” a visibly candid Mehta told developers at the CII Real Estate confluence in Mumbai.
“Compliance is not another hurdle, they can’t be given out just because you must give them out,” he added, “They help you monitor your own project and help the buyer know what’s happening. That reduces litigation and brings you to a point where you have a happy customer at the end of the day.”
The real estate regulatory body chief was addressing developers’ concerns over the pace — or the lack of it — of RERA registrations in the state, especially concerning projects in Mumbai.
In January-June 2022, 3622 projects were registered with the regulator. This number dropped to 2,815 between July and December.
Sources at the regulator have indicated that the drop is on account of increased scrutiny on the part of Maha RERA while registering projects. Mehta confirmed that the scrutiny was here to stay, and that the onus was on developers to do their homework as far as projects are concerned.
“Please educate yourself about your projects,” said Mehta, “If you don’t know your own project, and don’t know what is happening on the ground, who else do we expect to know? A developer recently wanted to know what RERA Form 5 is. It’s important that you know these things.”
Developers to be educated on RERA compliance
Earlier, newly elected CREDAI MCHI president, Dominic Rommel said the trade body hoped to resolve compliance issues in two months. He confirmed that a majority of the projects, including his, that received notices, were redevelopment projects in Mumbai.
“Because it’s a redevelopment, I have a reversal tax to be paid and that means I’m still paying for unsold inventory,” he said, “If this had been private land that I owned, I wouldn’t have paid after receiving my occupation certificate because there are no services.
He added: “Even in Mumbai, we got the OCs, but we didn’t upload our Form 4 — give us 45 days; that number (defaulting projects) will come down from 16,000 to about 1,000.”
CREDAI has said it will embark on a process of educating its members over maintaining better compliance parameters as far as real estate projects are concerned.
“Sixty percent of the average Indian family’s wealth creation happens in real estate, and that’s why we keep telling our developers to get compliant,” said Boman Rustom Irani, newly elected CREDAI National president, “Compliance is something that people don’t understand initially and that’s why there’s resistance. We are going to continue educating.”