The new MahaRERA rule help home buyers to track project status

Posted on January 31, 2022 by zeeshan

MahaRERA recently issued a circular requiring promoters to provide different types of certificates. These certificates would be from engineers, architects and chartered accountants to the banks. With a copy to the real estate regulatory authority before withdrawing any amount received from the buyers, stating that the payments are in proportion to the percentage of construction completed. The amounts received from the allottees deposited to a separate account.

MahaRERA will upload these certificates provided by the architect and engineer to its website for the convenience of home buyers. This will mean that the home buyers can see the exact status of the project. For example, the amount of construction completed and costs incurred. Previously, the promoter had to receive certificates, and it was only necessary to submit a self-declaration to the bank.

Promoters must also verify their account separately within six months of the end of each fiscal year by a CA. They must also submit an account statement duly certified and signed by the CA. The audit by CA will confirm that the funds raised for a specific project have been used for that project and that the withdrawals correspond to a fraction of the percentage of work completed. This new rule applies to both ongoing, new and upcoming projects.

More financial transparency

The promoters are, in accordance with section (2)(l) D of section 4 of the Act, obliged to deposit 70% of the money raised for the project of the buyers in a separate account in the specified bank. This money used only to cover construction costs, land and other construction costs. To ensure that withdrawals are proportional to the percentage of project work performed. The developer must provide certificates from the engineer, architect and CA (Chartered Accountant) to MahaRERA, other than the bank, at each withdrawal until the project completion certificate is received.

The 2017 Maharera Circular allowed the organizer to make only one self-declaration every quarter. Instead of issuing these three certificates each time on every withdrawal from the bank account. Lawyer Anil D Souza, secretary of the Maharashtra State Bar Association, said, “MahaRERA has not only brought more transparency to the financial aspect of project management. But has also placed a greater responsibility on the promoters along with the engineer, the architect, and CA certifying at each step. Previously, home buyers were unable to know the status of their money, once they have invested in a project. But with this regulation, the authorities can regulate and track the dishonest practices of builders.

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Builders have to disclose the status of mortgage loans for apartments

Posted on November 15, 2021 by zeeshan

Real estate developers must declare security interests created by them for projects registered with an authority. The decision will increase transparency and inform potential home buyers about any mortgages or loans that the developer has taken in relation to the apartments they intend to buy, or the project itself.

This information is now available with the Central Registry for Securitization and Asset Reconstruction and Securities of India (Cersai). Cersai is the central authority that processes and stores such data. Established under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi Act), Cersai aims to prevent credit fraud, such as loans from different banks on the same property.

Cersai has collateral data created from 22 January 2016 for registered commercial banks and, with effect July 1, 2016 for all other persons registered with it. It has started the process of registration of data on security interest in residential and commercial properties under construction from June 2017.

Home buyers should be aware of the loan status of apartment-

MahaRERA has clearly stated that home buyers and winning bidders must also be aware of the security interest on real estate projects and apartments they are interested in buying. Often home buyers buy a property without knowing its mortgage or loan status, which later leads to lawsuits and legal complications.

If the developer took out a loan by mortgaging inventory or some apartments, and can not return it. The banks will then acquire the property to get their contingent back and that this process can affect the home buyer. However with the new decision this situation can be avoided as Cersai keeps a record of all properties that have been sanctioned for loan.

Real estate developers must now submit a report to Cersai on the security interests created in the property project. Along with an encumbrance certificate when the project registered with the authority.

In the absence of security interest, the developer must provide a supporting commitment or provide an undertaking. The developer also expected to submit a report to Cersai on changes in property security interests. According to MahaRERA, submitted Cersai reports must be generated within 10 days of the submission date.

MahaRERA Orders Acme Housing to pay interest of 21 months of delay

Posted on May 21, 2021 by zeeshan

Maharashtra Real Estate Regulatory Authority (MahaRERA) has commissioned developer Acme Housing India Pvt. Ltd to pay interest on deferred ownership. The authority has directed to pay 21 months of interest to homebuyers of the Alpinia project in Thane. In accordance with section 18 of the RERA Act.

The order from MahaRERA member Vijay Satbir Singh was received in response to a complaint from home buyers Aniket and Rajashri Alashe. They had booked an apartment in this project in December 2014 with the promise of ownership until 31 December 2017. The buyer also made a payment of Rs 1 crore. But the developer did not transfer the property under the registered sale and purchase agreement.

Thane Municipal Corporation was responsible for the delay!

Advocate K.R. Shekhawat, quoted by Acme Housing India Pvt. Ltd. strongly opposed the demand for deferred ownership. He said clause 9.2 of the agreement allows home buyers to terminate the agreement if the ownership has not been transferred. But they had not canceled the agreement. Shekhawat said that clause provides for an extension of the period of ownership in the presence of force majeure. (Force Majeure refers to a clause included in contracts to exclude liability for unpredictable and natural disasters that disrupt the course of events and obstruct participants from completing their task).

Claiming that Mumbai High Court did not allow Thane Municipal Corporation to issue building permits and Occupancy Certificates (OC) for projects on Ghodbunder Road due to lack of water in PIL (Public Interest Litigation). He said the Alpinia project suffered from this stay order because the project was near Ghodbunder Road.

Shekhawat also claimed that the demonetization and implementation of RERA and GST created a monetary crisis. This creates a lack of funds and daily wage laborers could not hire for construction work. He also cited a lack of sand, cement, and ready-mixed concrete in 2013-2014 as well as a ban on sand mining as reasons for the delay in project completion.

K.R. Shekhawat also accused Thane Municipal Corporation and said the OC granted four months after the completion of the project. He further said the ownership offered to home buyers after receiving OC. But they approached MahaRERA instead and therefore their complaint could not be resolved after granting the OC.

Violation of sale and purchase agreement

Lawyer Tanuj Lodha, representing home buyers, filed an objection and firmly rejected the developer’s claim. He claimed that the developer had accepted significant capital from buyers and the excuse of force majeure is baseless. He claimed that the developer had violated the terms of the sale and purchase agreement and the Maharashtra Real Estate Court of Appeal. In addition, the Bombay High Court has clearly ruled that the developer is obliged to pay interest on deferred ownership. Under section 18 of the RERA in the event of a breach of the terms of the agreement.

Developers should be aware of market risks!

MahaRERA member Vijay Satbir Singh noted that the sale agreement refers to a six-month extension or grace period until June 30, 2018. But by that date, the developer had not granted ownership. He rejected arguments about demonetization, RERA, GST, sand mining, etc. He said that the developer should have a good understanding of the real estate sector and market risks before starting the project. The developer failed to inform the applicants about the restrictions and also did not provide explanation on delayed possession.

He claimed that the Maharashtra Ownership of Flats Act (MOFA) allows the developer a maximum extension of six months or until June 30, 2018. After RERA came into force on May 1, 2017. The developer should pay interest on late ownership in accordance with the provisions of section 18.

Singh also noted that the buyers filed a lawsuit on June 20, 2020, after the developer received the OC and offered ownership of the apartment on March 3, 2020. “In that sense, MahaRERA feels that under the provisions of section 19 RERA. The buyers are obliged to take possession of the apartment within 2 months from the date of OC. However, the applicant violated the provisions of section 19(10). He noted and denied the increase in interest after March 3, 2020. The order stated that Acme Housing should pay 9.3 percent interest for each month from July 1, 2018, to March 3, 2020.

Maharashtra Govt. nods e-payment of stamp duty

Posted on March 8, 2013 by designer

Renovating the entire stamp duty collection system, Maharashtra Government has approved e-payment of stamp duty.

Maharashtra govt decides to go online for property tax payment.

Property transactions will be easier in Maharashtra now. And you will have more convenience on moving around from office to office, one to the other. All this will be possible in Maharashtra where the government has decided to accept e-payment of stamp duty.

To pay stamp duty for your property transactions, you may soon be spared of doing the rounds of multiple offices.

Under the new model, the stamp duty for property transactions will be collected by authorized banks. With the approval the buyers will be able to pay the property tax in the bank counter.

Under the new system, the buyer, or the one who needs to pay the property tax, can pay the property tax in the bank. However this new system is applicable only for the sum over Rs.5000.

Property deals will be easier in Maharashtra with online tax payment

Once the stamp duty is paid with the bank officer who collects the amount, the officer will return a digital bill to the payer. The bill, known as Electronic Secure Bank and Treasury Receipt (eSBTR), will look like a stamp paper. Moreover it works as a stamp paper.

While the payment is made, the customer has to provide all details related to the property transactions to the bank officer who will feed all the given details in to an online database.

The digital bill or the e-receipt is expected to be more secure than traditional stamp papers. It is the main difference between the two. Traditional stamp papers are more viable to falsifying.

Making it more secure, the category of the paper used for the receipt also will be entered in the database. So it will be easier for the officials to track the receipts and identify whether the produced receipt is fake or original.

The new system of paying property tax through banks will be first initiated in Mumbai and will be followed by Pune. The new system will be introduced in other cities afterwards.

Properties In Pune Unsold; Boon For Home Buyers?

Posted on February 11, 2013 by designer

Home buyers look with lure to attain a better one among the many unsold properties in Pune. The home buyers are expected to bargain for the unsold properties in Pune.

Properties in Pune remain unsold. Home buyers see it as a boon.

Vast numbers of properties in Pune remain unsold. Recently residential market in the city has experienced stable property prices for a few couples of weeks. Home buyers consider this as a boost for them as they will have plenty of options to choose from. They are also hopeful of attaining properties in Pune at lower rates through bargaining with the builders.

Global property consultant Cushman & Wakefield’s October-December (2012) quarter residential research report stated that the home launches fell sharply in the last quarter of 2012. Though there was a substantial increase in home launches here in the first three quarters of the year, the final quarter faced around 60% fall in new launches. Continue reading →

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