Alarmed by scant work completion at large projects despite huge spends, the Maharashtra Real Estate Regulatory Authority (MahaRERA) plans to hire private investigators to inspect construction sites and prepare a report on the project status wherever it suspects financial wrongdoings.
The MahaRERA has prepared a list of 300 huge real estate projects of over Rs 500 crore each where a significant amount has been spent but very little work is completed.
A senior MahaRERA official not wishing to be named told Moneycontrol, "Wherever the authority is satisfied that a particular project needs to be inspected the investigators will go there on the ground. This will mean where work completed does not match the actual financial expenditure. They will also go on site visits on directions of the authority after suspicion due to complaints from allottees."
What is the scope of work for investigators?
According to MahaRERA officials, the investigators will prepare a report on the actual progress of the construction work and other related matters relating to the construction site.
The report format will include project details such as stages of construction, target of completion approved by RERA, target set by developer and opinion of the investigators as to by when they feel the project can be completed, the official said.
The investigator will have to complete the inspection and submit the report in a timeframe decided by MahaRERA. The majority of projects that need to be investigated are in Mumbai Metropolitan Region and Pune and are a mixture of lapsed and ongoing projects.
Read: INDIA'S MOST DELAYED RESIDENTIAL PROJECTS
Who will be eligible to become investigators?
According to the criteria approved by the authority, the applicant may be a firm/LLP/company having at least one of its partners, director or employee registered as a valuer with the Commissioner of Income Tax (CIT) or with the Insolvency and Bankruptcy Board of India (IBBI). The applicant should have an experience of five years as a valuer.
Lapsed project vertical
This initiative by the MahaRERA's lapsed project vertical was announced in June this year.
Read: MahaRERA to have dedicated vertical for 4,500 stalled real estate projects in Maharashtra
MahaRERA chairman Ajoy Mehta on June 22 announced the formation of a dedicated vertical on lapsed or stalled real estate projects to get these projects moving by either the existing developer taking it ahead or buyers taking over the project or by roping in a new developer.
“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,” Mehta was quoted as saying.
Read: Here's why the number of lapsed real estate projects increased by 112% in Maharashtra
When is a real estate project declared lapsed?
Every project registered by a developer with MahaRERA is given three to four years for completion, which is considered a reasonable time, 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.
Also read: MahaRERA will start issuing suo motu show-cause notices to over 4.5k lapsed real estate projects
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.
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