The Maharashtra Real Estate Regulatory Authority (MahaRERA) had announced on September 4, that it will start grading real-estate projects in the state from April 2024.
This, MahaRERA has maintained, will help homebuyers make informed decisions. However, below are five things that homebuyers need to keep in mind about the grading of real estate projects in Maharashtra.
1) Grading of real estate projects and not developers
According to MahaRERA, it has decided to grade real estate projects, and homebuyers should not have a misconception that grading is for the real estate developer or their firm.
"Homebuyers should keep in mind that real estate projects are registered with MahaRERA and developers upload information of the project along with their company details. However, since the selling and exchange of money here is for the projects, MahaRERA is grading projects. Hence, grading of particular real estate projects should not be misunderstood as grading of that real estate developer or their firm," a senior MahaRERA official told Moneycontrol.
2) Frequency of grading
The grading matrix will be updated every six months of the financial year. The first quarter that will be considered for grading of real estate projects will start from October 1, 2023 to March 31, 2024.
The grading matrix will be done after the last date for developers to upload a quarterly progress report (QPR) ends on April 20, 2024, according to MahaRERA.
The real estate regulator will grade the project using the fully automatic MahaCRITI, MahaRERA's IT Solution, on the basis of the information submitted by developers on the website of MahaRERA.
3) Parameters for grading
According to MahaRERA, it has set several parameters based on which grades will be given. One of the most important parameters is that the grading will be done on the basis of information uploaded by the developer on the MahaRERA website.
The other parameters include technical details about the project, financial declaration about the project, bookings made, legal complications declaration about the projects, complaints filed against the developer in a particular project and the overall project overview compliance.
Also read: MahaRERA to grade real-estate projects every six months from April 2024
4) Cut-off date for grading
Over 40,000 projects have been registered in Maharashtra ever since MahaRERA's inception in May 2017. Of these, more than 12,000 projects have met all compliance requirements and informed MahaRERA of completing their projects.
However, for grading, only those projects registered post January 2023 will be considered in the first lot of grading. "Going further, we may make it voluntary for developers of old ongoing projects to grade their projects. But this is just an idea, nothing is being drafted or finalised on these lines," said a senior MahaRERA official.
5) What if projects get a bad grade?
Although MahaRERA has made this announcement, it has not said in what form it will do the grading.
Nilesh Shah, a lawyer based in Mumbai said, "For example, private cab aggregators give stars in the form of grading to their driver partners, which helps customers understand the kind of grading the driver partner has. Further, on google reviews we are able to give star ratings for real estate projects."
Shah added, "But what happens if the grading is bad? We need to wait and watch for that as to how the regulator moves ahead. If we take the case of private cab aggregators, it is not like the company stops doing business with those who have low stars unless there is something seriously illegal or a crime is committed by the partners. We can expect the same here since MahaRERA has said grading will help homebuyers make informed decisions."
Also read: Can Maharashtra RERA classify and rate real estate developers or projects?
Interestingly, MahaRERA Chairman, Ajoy Mehta, while speaking at an event on six years of MahaRERA, had stated that "the younger generation is into experience. Things are changing, people do not want to be stuck. The uberisation of real estate is going to come, and we are looking at how we regulate that."
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