MahaRERA that had earlier proposed grading of real estate projects in Maharashtra has now decided to not go ahead with it. Senior MahaRERA officials told HT.com that the Real Estate Regulatory Act, 2016 does not authorise regulators to grade projects.
“Hence, the plan to grade projects has been put on hold for now,” they said.
The Maharashtra Real Estate Regulatory Authority had announced plans to start grading real estate projects last year to help homebuyers make informed decisions. The regulatory authority had chosen four parameters based on information uploaded by the developers. These included technical, financial and legal details, and project overview.
Grading real estate projects in Maharashtra
The Bombay High Court while hearing a case relating to a stalled Mumbai real estate market in February 2023 had asked the state government whether MahaRERA can rate or classify developers to ensure that buyers can make informed decisions regarding the developer. MahaRERA had proposed the grading matrix around four months after this query was raised by the Bombay High Court.
According to MahaRERA, the grading matrix was proposed to be updated every six months in a financial year. “The first period will be from October 1, 2023 to March 31, 2024. The grading matrix shall commence once the due date for uploading the last quarterly progress report (QPR) is done by April 20, 2024,” MahaRERA had announced in September 2023.
Also Read: Details of real estate project grading expected to be made public in a month: MahaRERA chief
Has the plan to grade real estate projects now been put on hold?
Senior MahaRERA officials told HT.com that the plan to grade real estate projects in Maharashtra has now been put on hold.
“We are not going ahead with the plan for grading projects. How can MahaRERA being a regulatory watchdog also rate or grade projects? The Real Estate Regulatory Act does not categorically allow the same. If we go ahead with grading, it might be challenged by someone in the court of law tomorrow. We do not want this to happen and hence are not rushing into anything like this,” a senior MahaRERA official, not wishing to be named, told HT.com.
In Maharashtra, more than 47,400 projects have been registered since MahaRERA came up in May 2017 and more than 15,600 projects have been completed. The MahaRERA, since its inception, has received more than 26,800 complaints of which orders have been passed in more than 17,900 complaints, according to the MahaRERA data.
Also Read: 5 orders passed by MahaRERA to safeguard homebuyers’ interests in Maharashtra
What does the Real Estate Regulatory Act say?
Section 32 of the Real Estate Regulatory Act, 2016 states that Authority shall in order to facilitate the growth and promotion of a healthy, transparent, efficient and competitive real estate sector make recommendations to the appropriate Government or the competent authority, as the case may be.
Further, section 32 (f) states about measures to encourage grading of projects on various parameters of development, including grading of promoters.
The MahaRERA in June 2023, had stated that one of the key functions of section 32 (f) is to facilitate grading of projects on various parameters of development, including grading of promoters (developers). It had, therefore, released a consultation paper outlining the framework for grading real estate projects and invited public suggestions and objections.
Manoj Saunik, former chief secretary (CS) of Maharashtra and a former journalist, took charge as the new chairman of Maharashtra Real Estate Regulatory Authority (MahaRERA) on September 20.
Saunik is a 1987 batch Indian Administrative Services (IAS) officer who retired as CS of Maharashtra in December 2023. He was the principal advisor to Maharashtra Chief Minister Eknath Shinde. Saunik replaces Ajoy Mehta as chairman of MahaRERA.