In a first, the lapsed projects vertical of Maharashtra Real Estate Regulatory Authority (MahaRERA) has issued show-cause notices to 40 lapsed real estate projects across the state.
The MahaRERA has given one month's time to the developers of these projects to give an explanation as to why their projects have lapsed.
These notices were issued in the first phase of MahaRERA's plan to issue notices to over 4,500 lapsed projects.
A senior MahaRERA official not wishing to be named told Moneycontrol, "The notices to 40 developers have been issued in last one week. The notices have been issued to such projects where 90 percent sales and 90 percent work are completed, but work remains halted and the project has lapsed."
The official added, "We have given a month to these developers to respond. We have asked them why action should not be taken against their projects under sections 7&8 of the RERA Act. Further action will be taken after getting responses from these developers. Out of the 40, the majority of the notices are issued to developers in Mumbai Metropolitan Region (MMR)."
Under sections 7&8 of the RERA Act, the MahaRERA has powers to revoke the registration of the project and also appoint an association of allottees to take over the project and complete it.
Also read: MahaRERA will start issuing suo motu show-cause notices to over 4.5k lapsed real estate projects
When is a real estate project declared as lapsed?
Every real estate project that is registered by a developer with MahaRERA is given three to four years for completion, considered a reasonable time period, followed by the issuance of a registration number for the project.
A search on the MahaRERA website using this number will throw up all details relating to the project. The registration number is to be published 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 an extension. Once the registration of the project is declared ‘lapsed’, the developer cannot advertise, market, book, sell or offer to sell, or invite persons to invest in these projects. Such projects cannot be registered by the registrar of the revenue department.
1,000 lapsed projects to get notices soon
According to MahaRERA officials, issuing notices is a continuous process in a phased manner. Notices to over 4,500 lapsed projects will be issued. The stuck projects are worth over Rs 78,000 crore.
The officials added that in the first and second phases, the authority will issue notices to around 1,000 lapsed real estate projects.
How many projects have lapsed in Maharashtra?
According to MahaRERA data, as many as 4,555 real estate projects have lapsed in the state, as of March 2022. The largest chunk is from Pune and Mumbai with 1,216 and 649 lapsed projects, respectively.
The third highest number—560—is from the Raigad district, with several areas falling under MMR. This is followed by Thane and Palghar districts—also parts of MMR.
Also read: MC Exclusive | Over 50% projects tagged ‘ongoing’ since MahaRERA, still await completion
What is a lapsed-project vertical?
MahaRERA chairman Ajoy Mehta on June 22 announced the formation of a dedicated vertical on lapsed or stalled real estate projects.
The objective of this vertical is to ensure that these lapsed projects get moving either by developers taking it ahead, buyers taking over the project or handing the project to a new developer.
Mehta was quoted as saying on June 22, “We have verticals for grievances, complaints, registration, adjudication, and administration. Similarly, this vertical will be for stalled projects. If we have to look essentially 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 3 lakh apartments that are stuck, 1.28 lakh do not have bookings. My focus is on stalled projects where there is money from homebuyers involved. The approximate worth of stuck projects is expected to be Rs 78,000 crore. We will tackle money from banks and financial institutions at a later stage.”
Also read: MahaRERA to have dedicated vertical for 4,500 stalled real estate projects in Maharashtra
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