The number of stalled projects or those projects whose registration with Maharashtra Real Estate Regulatory Authority (MahaRERA) has lapsed increased by 112 percent within a period of 15 months from January 2021 to March 2022, according to the official data of MahaRERA.
According to MahaRERA data, from inception in May 2017 till December 2020, registrations of 2,141 real estate projects lapsed in Maharashtra. Further, an increase of over 112 percent was reported between January 2021 and March 31, 2022, taking the total number of lapsed real estate projects to 4,555.
What does data on lapsed projects reveal?
According to MahaRERA data, out of the total 4,555 lapsed projects, as of March 2022, the largest chunk is from Pune and Mumbai. Pune, known as the cultural capital of Maharashtra, is home to 1,216 lapsed projects, followed by Mumbai, with 649 lapsed projects.
The third-highest number of 560 lapsed projects is from Raigad district, with several areas being under the Mumbai Metropolitan Region (MMR). This is followed by Thane and Palghar districts — parts of MMR.
Nashik, another tier-2 city in Maharashtra, has 211 lapsed projects.
The two Union Territories of Dadra, Nagar Haveli and Daman and Diu account for 27 lapsed projects. The remaining districts of Maharashtra account for 1,083 lapsed projects.
Why the sharp rise in lapsed projects?
MahaRERA has maintained that the number of lapsed projects has increased due to old projects that have been stuck, or are facing some issues with permissions, finances of the developers, or ongoing legal battles.
Vijay Satbir Singh, Member of MahaRERA who retired last week, told Moneycontrol on July 4, "These are old projects which were there before RERA came into existence. These were registered under the Maharashtra Ownership of Flats (Regulation of the Promotion, Construction, Sale, Management and Transfer) Act, 1963, and after RERA came into being, these continued as ongoing projects. These ongoing projects were already facing some difficulties, and that is why the lapsed projects have increased drastically. Also, when these projects got registered as ongoing projects in 2017, naturally they were given a reasonable timeframe of three or four years for completion, which ended around 2021."
MOFA came into existence in Maharashtra in the early 1960s, and RERA in May 2017. The RERA Act superseded the MOFA.
Ramesh Prabhu, a chartered accountant (CA) who handles cases of MahaRERA for aggrieved buyers, said, "This number of roughly 4,500 is low. In the coming days, more lapses are expected to be reported. That’s because in the initial days after RERA came into being, an analysis of 13,000 registrations had revealed that around 8,000 projects were ongoing and only 5,000 were new projects. So, these ongoing projects are probably stuck and the numbers might increase in the coming months."
When is a project declared as lapsed?
Every project that is registered by a developer is given three to four years for completion. Every project is issued a registration number. A search on the MahaRERA website using this number will throw up all details relating to the project. The registration number is to be publicised by the developer in every advertisement or promotion activity related to the project.
However, a project is termed as lapsed when the timeline given for completion is not met, and the developer has not applied for extension. For example, a project registered on May 10, 2017 with a completion deadline of May 10, 2021 is termed as lapsed from May 11, 2021, in case the developer has not applied for extension of the project.
Once the registration of the project is lapsed, the MahaRERA issues the list of such projects with a message below it stating, “The validity of MahaRERA registration for the following projects has expired. The promoter (developer) shall not advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any of these projects.”
What is MahaRERA doing about lapsed projects?
MahaRERA, on June 22, had launched a vertical dedicated to lapsed projects in the state. The vertical has been made operational and a separate team will be looking at the stalled projects.
Announcing the same, Ajoy Mehta, Chairman of MahaRERA, on June 22 had said, "We have verticals for grievances, complaints, registration, adjudication, and administration. Similarly, this vertical will be for stalled projects. If we have to look at stalled projects, the situation is such that out of 4,500 stalled projects, 1,500 do not have bookings. In terms of apartments, out of the three lakh apartments that are stuck, 1.28 lakh do not have bookings. My focus is on stalled projects where there is money from home buyers involved. We will tackle money from banks and financial institutions at a later stage.”
According to MahaRERA, in the last five years ending June 22, 2022, it has registered over 36,000 projects worth Rs 8.69 lakh crore. Of these, over 12 percent or 4,500 project registrations have lapsed, the worth of which adds up to around Rs 78,000 crore.
The role of this vertical for lapsed projects is to have a team that will facilitate redevelopment of the stalled or lapsed projects and bring out ways to ensure that the number goes down. At a later stage, the team will go on the ground to look for solutions for these 4,500 lapsed projects.
Under Section 8 of the RERA Act, upon revocation and lapse of the project, the regulatory authority (RERA) shall take control and devise a plan to ensure completion of the project. RERA can also impose certain conditions on the developer in order to complete the project.
Also read: MahaRERA to have dedicated vertical for 4,500 stalled real estate projects in Maharashtra
Projects registered in last 5 years
MahaRERA data for the period May 2017 to March 2022 reveal that 34,298 projects have been registered. Of these, the highest — 8,778 — are from Pune, 4,833 from Mumbai, 4,502 from Thane, 3,866 from Raigarh, 2,531 from Nashik and 2,023 from Palghar.
Pune has more registrations, lapsed projects than Mumbai. Why?
According to MahaRERA data, as of March 2022, at 8,778, Pune has the highest number of registrations in Maharashtra, with 1,126 lapses. Mumbai stands second with 4,833 registrations and 649 lapsed projects.
"There are chances that if we look at Mumbai alone, it may have less registrations than Pune considering the scope of new construction is limited in Mumbai compared to Pune," added Prabhu.
However, MahaRERA officials said that if the data of Mumbai and the entire MMR region are clubbed together, it is seen that MMR has more registrations as well as lapses compared to Pune. MMR covers the districts of Raigarh, Palghar, Thane, Mumbai suburban and Mumbai city.
Meanwhile, Sanjay Deshmukh, a retired IAS officer who has been appointed in MahaRERA as a consultant for looking after stalled projects, had told reporters on June 22, “Of the total 4,500 lapsed projects in Maharashtra, around 50-60 percent are from Mumbai Metropolitan Region."
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