ESTABLISHING A HOME BUYER / ALLOTTEE GRIEVANCE REDRESSAL CELL: AN INITIATIVE BY MAHARERA
Anurag Pattnaik
Associate Trainee at Ramanand Goyal & Co.| RERA| Land Laws| Real Estate Compliance and litigation| Civil Litigation| Insolvency laws| Commercial Arbitration
The real estate sector in Maharashtra is set to witness a significant improvement in its grievance redressal mechanism for home buyers and allottees. In a bid to enhance transparency, efficiency, and customer satisfaction, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has issued Circular No. 45/2023, dated August 24, 2023, which mandates the establishment of a Home Buyer / Allottee Grievance Redressal Cell by all promoters.
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Background and Legal Framework
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The Real Estate (Regulation and Development) Act, 2016 (the Act) was enacted by the Government of India to regulate and promote the real estate sector, ensuring the protection of home buyers and promoting timely project execution. The Act came into full force on May 1, 2017. Following this, the Government of Maharashtra, via Notification No. 23 dated March 8, 2017, established MahaRERA to oversee and implement the provisions of the Act within the state.
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MahaRERA operates under the guidelines laid out by the Maharashtra Real Estate Regulatory Authority (General) Regulations, 2017. The Authority, empowered by Section 37 of the Act and Regulation 38 of the Regulations, issues directives to stakeholders—promoters, real estate agents, and allottees—to ensure compliance and address sectoral challenges as they arise.
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Defect Liability of Promoters
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Before delving into the specifics of the recent circular, it's essential to understand the liability of promoters after the delivery of project units. According to Section 14 of the Act, any structural defect or defect in workmanship, quality, or provision of services that is brought to the promoter's notice within five years from the date of possession must be rectified by the promoter at no additional charge within thirty days.
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S.14. Adherence to sanctioned plans and project specifications by the promoter.—
(3) In case any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale relating to such development is brought to the notice of the promoter within a period of five years by the allottee from the date of handing over possession, it shall be the duty of the promoter to rectify such defects without further charge, within thirty days, and in the event of promoter's failure to rectify such defects within such time, the aggrieved allottees shall be entitled to receive appropriate compensation in the manner as provided under this Act.
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Failure to do so entitles the allottee to receive appropriate compensation as provided under the Act.
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This defect liability clause is a standard inclusion in the Agreement of Sale as per RERA rules across various states.
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12. DEFECT LIABILITY
It is agreed that in case any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the Promoter as per the agreement for sale relating to such development is brought to the notice of the Promoter within a period of 5 (five) years by the Allottee from the date of handing over possession, it shall be the duty of the Promoter to rectify such defects without further charge, within 30 (thirty) days, and in the event of Promoter's failure to rectify such defects within such time, the aggrieved Allottees shall be entitled to receive appropriate compensation in the manner as provided?under?the?Act.
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Rationale for the Grievance Redressal Cell
The primary focus of MahaRERA is to facilitate a healthy, transparent, efficient, and competitive real estate market that safeguards the interests of home buyers and ensures quick resolution of disputes. Feedback from the sector indicated that the grievances of allottees were not being resolved promptly, often due to confusion over whom to approach within the promoters' offices. Sales staff, typically the initial point of contact for buyers, are often ill-equipped to manage post-sales issues, leading to unresolved complaints and potential project delays.
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Key Recommendations of the Circular
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To address these concerns, MahaRERA recommends the following measures:
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1. Establishment of a Grievance Redressal Cell: Every promoter is encouraged to set up a dedicated Grievance Redressal Cell responsible for receiving and addressing complaints from home buyers/allottees promptly. This cell should focus on fair and expeditious resolution of issues to prevent them from escalating into major disputes that could hinder project completion.
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2. Appointment of a Grievance Redressal Officer: Each Grievance Redressal Cell should have at least one designated Grievance Redressal Officer. This officer's contact details should be easily accessible to home buyers/allottees, ideally through the promoter's webpage.
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3. Transparency and Reporting: Promoters are required to disclose the number of complaints received and resolved publicly. This information should be updated regularly on the promoter's webpage to maintain transparency and accountability.
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4. Impact on Project Grading: The existence and efficiency of a Grievance Redressal Cell will be a factor in the grading of real estate projects by MahaRERA. Projects with effective grievance redressal mechanisms will likely receive better grades, enhancing their market reputation and buyer trust.
Benefits of the Initiative
Implementing these recommendations aims to foster a more customer-centric real estate sector. By ensuring grievances are addressed swiftly and fairly, the initiative is expected to:
- Improve buyer confidence and satisfaction.
- Enhance transparency and accountability within the real estate market.
- Promote timely project completion by mitigating disputes early on.
- Establish a competitive real estate environment that prioritizes customer service
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Conclusion
MahaRERA's directive to establish a Home Buyer / Allottee Grievance Redressal Cell is a significant step towards improving the regulatory landscape of Maharashtra's real estate sector. By mandating a structured approach to grievance redressal, MahaRERA is ensuring that the interests of home buyers are protected, and the sector evolves in a more transparent, efficient, and customer-friendly manner. This initiative is poised to bring about a positive transformation, benefiting all stakeholders involved in real estate transactions in Maharashtra.
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