Builders are pushing back the date of delivery of flats to buyers by several months and even years as a result of the new real estate law in the state. This has put many buyers in a bind because their agreements of sale with the builders mention a much earlier date.
Developers registering projects with the Maharashtra Real Estate Regulatory Authority (MahaRera) are mandated to declare the delivery date of projects. There are penalties if they delay beyond the date submitted.
People who have booked flats in projects across the city and in Pune have complained that their builders had committed to handing over the apartments in, say, 2017 and 2018. However, during registration, the developers have shown the date of possession as 2021-22.
Real estate observers say builders have intentionally pushed back the date to allow themselves a buffer in case the project gets stuck for some reason. Many builders are giving project completion deadlines to MahaRera which are different from the ones they have promised flat buyers. Developer Boman Irani, vice-president of MCHI-CREDAI which represents builders, said the date of delivery mentioned during Rera registration is “acceptable.“
“Builders are keeping a margin of six months to one year for possession. The date submitted to Rera to hand over possession is the final cut-off.But developers will deliver much before this date,“ he said.
MahaRera chairman Gautam Chatterjee, however warned that builders will have to pay penalties for delays beyond what is stipulated in the registered agreement for sale. “It (possession date) will not be based on the date submitted as the revised date at the time of registering the project with us,“ he said.
A director of a global firm, who booked an apartment in Kandivli, told TOI his builder was to deliver his flat in December 2017. “But in the Rera declaration he has given date of possession as April 2019,“ he said.“They have no respect for commitment. If he fails to deliver in December 2017, I cannot complain to the authority for the delay,“ he added.
Another buyer said many like him will now have to “recalibrate their finances“ because developers have suddenly changed the goal post.
In a Chembur project by a prominent developer, a source said, the developer has extended the delivery date from December 2017 to 2022. “The contract has a different date while date submitted to Rera has a different timeline,“ he said. Similarly, the deadline for a redevelopment project in the eastern suburbs has been pushed back from 2017 to 2022.
But the most extreme case is that of a developer in Bandra (E), who has given the possession date of 2025 although he started the project in 2010 and promised delivery in 2014.
WHAT RERA RULES SAY
Shirish Deshpande of Mumbai Grahak Panchayat said developers are worried that if they do not deliver on the scheduled date, the penalty under Rera is 10% interest on amount paid by purchaser.
“We found some projects are 90% complete, yet builders are declaring possession date more than a year later,“ he said.“The unilateral extension of date by not amending the flat agreement is to avoid penalty,“ he added.
Pune-based RTI activist Vijay Kumbhar said the objective of Rera was to ensure accountability towards buyers, protect their interest and reduce fraud and delays. “But it seems project promoters have decided to challenge the competence and power of the regulatory authority,“ he said, adding Rera officials do not have enough infrastructure to verify documents.
A Knight Frank report released in August said registration data showed developers took “generous extensions“ while registering projects under Rera. “Flouting project completion timelines has always been par for the course for builders,“ it said.
According to the report, 57% of residential units registered have extended their timelines by over a year, while close to 30% have extended their contracted project deadlines by over two years.