MahaRERA issues SOP to fast-track compensation recovery for homebuyers

MahaRERA introduced a detailed SOP to ensure faster compensation recovery from developers, with strict timelines, stronger enforcement, and option of court action in cases of persistent non-compliance

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has rolled out a Standard Operating Procedure (SOP) aimed at improving the time-bound recovery of compensation from developers in cases of non-compliance or defaults. The circular outlining the SOP has been released in line with directions issued by the Bombay High Court. 

What happens when developers fail to pay compensation? 

For the first time, cases where a developer fails to pay compensation despite multiple opportunities will be referred to the principal civil court in the relevant jurisdiction for further action. Following such a referral, the developer may face imprisonment for up to three months. The authority said this provision is expected to strengthen recovery mechanisms and provide timely relief to homebuyers.

 

How much time do homebuyers have to seek recovery? 

MahaRERA has set a 60-day timeline from the date of the order for compensation to be paid. Under the SOP, if a homebuyer does not receive compensation within this period, they must file a non-compliance application seeking recovery of the amount with interest, delayed possession interest, or compensation, as applicable.

 

How will MahaRERA process non-compliance applications? 

MahaRERA will hear such applications within four weeks of receipt. If it is established prima facie that the developer has not complied with the order, the authority will grant a reasonable period for adherence. If the developer fails to comply within this timeframe, they may be required to submit an affidavit detailing all movable and immovable assets, bank accounts, and other investments.

 

What enforcement measures will be used to ensure recovery? 

To ensure recovery, a recovery warrant will then be issued to the relevant district collector to initiate attachment or seizure of assets and bank accounts. If the developer does not furnish details of their properties and financial holdings, the matter will be referred to the principal civil court for further action. Under the Code of Civil Procedure, such defaulting developers may face imprisonment of up to three months.

 

Why do homebuyers approach MahaRERA for compensation? 

“Left with no amicable resolution with the developer, often, homebuyers approach MahaRERA seeking relief on multiple issues ranging from failure to receive the apartments’ possession as per the deadline, sub-standard construction quality, lack of parking, missing amenities, etc. Such complaints are heard by MahaRERA’s designated adjudicating officers, who, in turn, on the merits of the case, order for compensation,” MahaRERA said.