MahaRERA issues 5 directives for protecting property owners, homebuyers and real estate agents

Maharashtra Real Estate Regulatory Authority (MahaRERA) has released five regulatory orders and circulars aimed at protecting the interests of homebuyers, landlords, and real estate agents.

MahaRERA recently garnered attention for its directive aimed at facilitating prompt payment of brokerage to real estate agents.

This initiative is anticipated to minimize conflicts regarding the commissions that developers have pledged for property transactions facilitated by these agents.

The Authority has mandated that the sales agreement must include a clause specifying the commission, brokerage, and any fees that the promoter or allottee has agreed to pay in property transactions conducted by a registered agent.

In the past week, MahaRERA has released a minimum of five regulatory orders. Let’s  take a detailed look at them.

MahaRERA’s directive requires that the brokerage fee to be paid to real estate agents is included in the sale agreement.

MahaRERA has mandated that the brokerage fees payable to real estate agents must be clearly stated in the sale agreement. As per the directive released on October 22, any sale agreement between the developer and the buyer, which involves a registered real estate agent, must specify the total amount (including taxes) to be paid as fees, commission, or brokerage by either the developer, the buyer, or both, depending on the situation.

This directive from MahaRERA will ensure that agents receive their fees and commissions promptly, thereby minimizing conflicts related to unpaid brokerages, according to real estate agents.

RERA registration is not necessary for plots that are 500 square meters in size.

An additional order from MahaRERA on October 22 has clarified that for proposed constructions on land measuring 500 sq m or less, RERA registration may not be necessary, regardless of the number of apartments authorized by the competent authority.

Legal experts indicate that exempting projects under 500 sq m from RERA registration could limit the remedies available to these buyers, particularly concerning completion timelines.

The MahaRERA circular clarifies the definitions of commencement and completion certificates for plotted development projects.

Further, On October 22, MahaRERA released a circular clarifying the definitions of a commencement certificate (CC) and a completion certificate for plotted development projects in accordance with the Unified Development Control and Promotion Regulations (UDCPR).

The authority has stated that the final approval granted for the land subdivision layout in form D-3 of the Unified Development Control and Promotion Regulations for Maharashtra State (UDCPR), or any similar approval with non-agricultural permission, will be regarded as the commencement certificate for a plotted development project.

 Additionally, Form 4 of MahaRERA must be properly filled out and signed to be recognized as a valid completion certificate.

Landlords are not required to maintain three separate bank accounts. 

The MahaRERA previously announced that beginning July 1, real estate developers would be prohibited from depositing funds received from homebuyers into multiple bank accounts. They must keep three distinct accounts for each project within a single bank to promote financial discipline and ensure projects are completed on time. However, since landlords are classified as promoters (developers) by the MahaRERA, there was uncertainty regarding whether they would also need to hold three separate bank accounts.

MahaRERA announced on September 4 that landlords who are not considered promoters (developers) will not be required to maintain three separate bank accounts.

Parking information in the sale agreement and allotment letter

MahaRERA previously mandated that real estate developers must include specific details regarding the parking spaces allocated or sold to homebuyers within the sale agreement. Additionally, they are required to provide an allotment letter to eliminate any potential confusion and avoid future disputes. This directive was officially announced by the authority on September 3.

The regulator issued the order following numerous complaints from homebuyers regarding issues like building beams blocking vehicle parking, difficulties in using designated parking spaces, and insufficient maneuvering room.

Parking details in agreement and allotment letter

MahaRERA had earlier also asked real estate developers to mandatorily include details of parking space allotted or sold to homebuyers in the sale agreement and issue an allotment letter to prevent any ambiguity and future disputes. This direction was formally notified by the authority on September 3.

The regulator passed the order after it received several complaints from homebuyers such as building beams obstructing parking of vehicles, inability to park in the allotted slot, inadequate maneuvering space. Consequently, the regulator decided to make it mandatory for developers to include all details such as size, height, width related to parking in annexures to the allotment letter and sale agreement.