Why Deemed Conveyance should be brought under MahaRERA?
Government of India enacted The Real Estate (Regulation and Development) Act, 2016 and all sections of the Act came into force with effect from May 01, 2017. Under this Act, Government of Maharashtra has established Maharashtra Real Estate Regulatory Authority (MahaRERA) for regulation and development of real estate sector in the State of Maharashtra, with effect from May 01, 2017.
RERA is a well thought Act and MahaRERA rules are very comprehensive. MahaRERA is going to positively influence all the aspects of real estate industry and all its stakeholders are going to be immensely benefitted by its presence.
The Builders & Estate Agents will earn respectability by merely registering themselves & their projects with MahaRERA. Their operations, if made compliant with MahaRERA requirements shall have them operate in a corporate manner. Their corporate operations will build trust with Flat buyers, thereby increasing their sales. The corporate Builders will have access to the debt finance instead of expensive equity finance, thus increasing their profitability.
The Flat buyer, the most neglected stakeholder of the real estate industry is going to be the biggest beneficiary of MahaRERA. The acts previously available to the disposal of the Flat buyer to address his grievances have been inadequate. Moreover, the time, the cost and the energy involved to establish his grievances have always been a deterrent in his actions. MahaRERA offers him a simple, cost-effective and time-bound mechanism for grievance redressal.
All the real estate project activities after May 01, 2017 are naturally coming under the purview of MahaRERA. The ongoing construction projects that have not obtained the Occupation/ Completion Certificate on May 01, 2017 are also coming under the purview of MahaRERA. This will be of great benefit to the Flat buyers who have invested their huge savings & earnings in the presently delayed projects.
Though MahaRERA is available for all the Flat buyers of new and ongoing projects, a very large section of Flat buyers will still be deprived of the MahaRERA benefits. This section of Flat buyers is peculiar and is having a unique set of problems.
This section of Flat buyers resides in Buildings where the Builder has neither obtained the Occupation/ Completion Certificate nor offered Conveyance to the Society formed by these Flat buyers. The Builder has abandoned the project and has vanished after pocketing his profit.
For these Societies, solving the problem of Occupation/ Completion Certificate is a must to obtain Deemed Conveyance, which is essential for Redevelopment. With paucity of open land for development, the Redevelopment of Societies remains the only viable option in many parts of cities. Moreover, there is a possibility that this section of Flat buyers will outnumber the Flat buyers of ongoing and new projects by a factor of 100 or more. There is an urgent need to address the grievances of this section of Flat buyers also.
The Societies of this section of Flat buyers have been using the recourse of Deemed Conveyance proceedings against the promoter with limited success. However, they have absolutely no recourse to obtain Occupation/ Completion Certificate on their own.
Now, out of frustration, these Societies are likely to complain against their Builders for their failure to register their Projects with MahaRERA. It would be interesting to see the views taken by MahaRERA against the deluge of these complaints. Moreover, these Societies approaching the present Competent Authority for Deemed Conveyance and MahaRERA for Occupation/ Completion Certificate violations is going to create a chaotic situation with practically no concrete results expected from any one of the Authorities.
In this scenario, the best solution shall be to have MahaRERA, the premier authority of the state to be the Competent Authority for Deemed Conveyance. In case of the Societies that have consumed the FSI less than the present FSI (including the Fungible FSI sanctioned), MahaRERA shall grant Deemed Conveyance to Societies furnishing an undertaking to obtain Occupation/ Completion Certificate after payment of Development Charges/ Penalties, if any.
The Societies shall register the Deemed Conveyance Deed after paying the Stamp Duty and Registration Charges. After registration of the Deemed Conveyance Deed, the Societies shall obtain the Occupation/ Completion Certificate on payment of Development Charges/ Penalties, if any.
The distinct advantages of this solution will be that, MahaRERA, the premier Authority shall ensure consistent decision making of high order and quick redressal of this long-standing grievance of a large section of real estate stakeholders. The Government and the Local Bodies shall get the revenue that has been denied so far. The Societies shall in turn get the Occupation/ Completion Certificate and Deemed Conveyance, making them eligible for Redevelopment. Further, Redevelopment of Societies shall improve supply of real estate, thereby positively affecting its price. Sequentially, the favourable price of real estate shall benefit the new Flat buyer.
Considering all these massive benefits, it is imperative that Deemed Conveyance should be brought under MahaRERA.
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May 09, 2017