The Real Estate (Regulation and Development) Act, 2016 (for short, RERA) which came into force on 1st May, 2017 has been enacted in the larger public interest for the purpose of settlement of disputes and smooth redressal of grievances between the home buyers and the builders/developers accompanied with increasing transparency in the real estate sector.[i]

Under section 34 of the said act, one of the functions of the RERA Authority is to register and regulate real estate projects and real estate agents registered under the act but however, sometimes there are situations where the builders/developers who have registered their real estate projects are unable to commence and complete the construction of the same or having commenced with the construction work are later rendered unable or are not in a position to complete their proposed new project/venture due to various reasons including paucity of funds, projects not being economically viable, litigation, inter se disputes/family disputes, change in planning, Government/ Planning Authority Notifications and therefore builders/developers placed in such circumstances are eventually compelled to discontinue their proposed new projects.

Order passed by the Maharashtra Real Estate Regulatory Authority in the matter of de-registration of real estate projects

[ii] The Maharashtra Real Estate Regulatory Authority (for short, "MahaRERA") passed an order vide a circular dated February 10, 2023 allowing de-registration of real estate projects only on assessing/examining the application received from the concerned promoters. The MahaRERA has in the said order also prescribed a procedure to be followed by the promoters/ builders/ developers for de - registering their real estate projects. The MahaRERA in the said order stated the following.

1. Pre-requisites for de-registration of a real estate project
   
   1. The real estate projects which have zero allottees i.e. only those real estate projects where there are no bookings shall be considered for de-registration.
   2. Where part of a registered real estate project is sought to be de-registered then there should be zero allottees in that part of the real estate project.
   3. In real estate projects where there are bookings, application for de-registration shall be entertained subject to the rights of such allottees being settled by the promoter and documents in that regard being submitted for verification along with the application for de-registration.
   4. When de-registration of part portion of a real estate project affects the rights of rest of the allottees in the balance part of such real estate project, then in that case 2/3rd consent of such allottees has to be submitted along with the application for de-registration.
       
2. Submission of application for de-registration of a real estate project
   
   • The promoter shall submit an application to Secretary, MahaRERA, in the prescribed format along with a Notarized Declaration�Cum-Undertaking in the format prescribed, until an online procedure is established for the same.
   • On receipt of such application, Secretary, MahaRERA, shall initiate action through the legal wing MahaRERA and place the matter before the Authority for appropriate orders including scheduling hearing if necessary.
      
3. Filing of complaints
   
   • Any aggrieved person may file a complaint in the matter of de-registration of the real estate project.
   • Such complaints shall be heard after due notice to the promoter and decided by the Authority expeditiously.
   • The terms and conditions as may be imposed by the Authority in the order passed in the complaint shall be binding upon the promoter.

Analysis of the order
The MahaRERA shall allow de-registration of a real estate project only upon the compliance of the conditions by the promoters/builders/developers as mentioned in the said order. The said order can be perceived to have been passed for the benefit of the home buyers/allottees as it allows a promoter to de-register a project only subject to the interest of the home buyers/allottees being settled in that regards. It is pivotal for the MahaRERA to pass orders allowing de-registration of a real estate project, taking into account the overall status of the project and considering the facts and circumstances of each case.

Implications of the order
We have heard of various instances of the home buyers /allottees waging a struggle and running from pillar to post for taking possession of their dream homes after having invested their hard earned money for the same. The said order will help to instill trust and confidence in the home buyers/allottees who are left in a lurch in stalled projects coupled with giving them a glimmer of hope by ensuring that their rights and interests are not jeopardized due to the abandonment of a real estate project by the promoter owing to the reasons mentioned hereinabove.

In the thriving construction industry, the de-registration process holds implications for both the promoters and the home buyers alike. As the real estate sector is now seen trying to regain its lost sheen emerged by the pandemic, it is vital that the people engaged in the real estate industry endeavor to generate a sustainable market in the near future.


End-Notes:

1. https://www.moneycontrol.com/news/business/real-estate/maharera-allows-deregistration-of-a-real-estate-project-by-developers-with-conditions-10054641.html
2. https://maharera.mahaonline.gov.in/Site/Upload/PDF/Order%20No%2042%20of%202023.pdf