New MahaRERA SOP cracks down on builders ignoring compensation orders

In a bold move to protect homebuyers and ensure accountability in the real estate sector the Maharashtra Real Estate Regulatory Authority MahaRERA has unveiled a new Standard Operating Procedure SOP for recovering compensation from developers The new directive mdash issued under the guidance of the Bombay High Court mdash introduces strict measures to ensure that homebuyers receive timely compensation for builder defaults MAhaRERA experts rue the fact that noncompliance applications are not dealt with sternlyDelayed enforcementAdvocate Godfrey Pimenta who practices in MahaRERA and is the trustee of Watchdog Foundation said ldquoThe SOP recently issued by MahaRERA to recover compensation from developers who flout its orders was long overdue It is regrettable that despite the provisions already outlined in the Act this framework has only been implemented after intervention by the High CourtAdv Godfrey Pimenta trustee Watchdog FoundationEven when MahaRERA issues orders developers frequently ignore them and the authority has been sluggish in addressing noncompliance applications mdash a responsibility delegated to its Adjudicating Officers AOs These officers routinely grant extensions to developers to file replies and written arguments turning what should be a straightforward process into a prolonged and tedious affair These delay tactics by developers leave allottees in limbordquoThat said despite the delay the rollout of this SOP is a welcome development but only if it is applied in both letter and spirit Even after its issuance the enforcement of recovery warrants via collectors and tehsildars has been painfully slow sometimes stretching over two to three years Worse still there appears to be a lack of coordination between MahaRERA and revenue officials which only adds to the frustration felt by allottees Pimenta concludedHighlights of SOPImprisonment for defaulters Developers who fail to pay compensation within 60 days of a MahaRERA order may face civil imprisonment for up to three months This penalty aims to deter noncompliant builders and protect homebuyers from prolonged delaysAsset disclosure requirement Developers who do not comply with compensation orders will be required to submit an affidavit detailing their movable and immovable assets bank accounts and investments Failure to do so could lead to further legal actionFasttracked recovery Homebuyers can file applications if compensation is not received within 60 days MahaRERA will hear these cases within four weeks and take swift action to recover the amount including asset seizure if necessaryCourt referral for persistent defaulters If developers continue to evade compliance their cases will be referred to the principal civil court of the respective area where further actions including imprisonment may be pursuedThe new SOP aims to streamline the process of compensation recovery and provide quicker relief to homebuyers facing issues like delayed possession or substandard construction MahaRERArsquos stringent measures are designed to hold developers accountable ensuring homebuyersrsquo rights are respected and enforced said MahaRERA insidersExpert viewCA Ramesh Prabhu founder chairman Maharashtra Societies Welfare AssociationlsquoThe Bombay High Court and its members are very much upset with the execution of MahaRERA orders as developers consistently fail to adhere to them There are two main types of orders issued by MahaRERA The first is for the recovery of money such as delayed interest or compensation and the other for refunds with interest However once these orders are passed developers often either refuse to refund the money file a review application or take no proactive steps towards complyingWhen homebuyers file execution applications the hearing for enforcement of these orders typically starts only after a year which causes further delays in delivering justice In many cases the District Collectorrsquos recovery proceedings even fall into cold storage The second type of order execution involves issues such as nonregistration of agreements by developers delays in handing over possession and the execution of cancellation deeds for allottees who have defaulted on paymentDespite these ongoing issues MahaRERA has not taken proactive steps which led to the High Courtrsquos intervention directing MahaRERA to appoint appropriate officials for the execution of orders This direction which aligns with the RERA Act and its rules aims to streamline the process By issuing this circular MahaRERA has made it clear that aggrieved parties can now question the authority and demand accountability for delays in executing the orders Currently more than 2000 cases are pending for execution highlighting the urgency of the situation and the need for stronger enforcement mechanismsrsquo