MahaRERA has decided to halt its proposed grading system for real estate projects in Maharashtra, citing that the Real Estate Regulatory Act, 2016, does not empower it to implement such a system. Designed to help buyers make informed choices, the grading was to evaluate projects on technical, financial, legal, and project overview parameters, updated biannually. The decision follows opposition from developers and concerns about legal complications. In 2023, the Bombay High Court questioned whether MahaRERA could rate developers to aid buyer decisions. Since 2017, MahaRERA has registered 47,400 projects, completed 15,600, and resolved 17,900 complaints.
MahaRERA has decided to pause the grading of registered real estate projects in Maharashtra, as the Real Estate Regulatory Act, 2016, does not provide regulators the authority to grade projects. The authority had intended to introduce a grading system evaluating projects based on technical, financial, legal, and project overview criteria. Announced last year, this initiative aimed to support homebuyers in making informed choices, with grading originally set to begin in October. However, a senior MahaRERA official informed TOI on November 6 that the grading system will not proceed due to regulatory limitations.
The official explained that although the decision to implement grading was aimed at helping homebuyers make informed choices, it would be put on hold if it does not fall within their jurisdiction. Another official added that since the Act does not authorize a regulatory body to grade projects, proceeding with the plan could lead to legal complications, which MahaRERA wishes to avoid. Additionally, developers had also expressed opposition to the grading system.
State CREDAI president Pramod Khairnar informed TOI that they had strongly opposed the grading system proposed by the authority, noting that the RERA Act includes no such provision. Khairnar explained that various factors could indirectly influence the grading process, potentially leading to malpractices. CREDAI had therefore opposed the proposal and welcomed the authority's decision to pause it. In February 2023, the Bombay High Court, during an inquiry related to a stalled real estate project in Mumbai, had questioned the state government on whether MahaRERA could classify or rate developers to help buyers make more informed choices about them.
In response to the High Court's query, the regulatory authority proposed a grading matrix four months later. MahaRERA stated that this matrix was intended to be updated biannually within each financial year. According to a September 2023 announcement, the initial grading period was scheduled from October 1, 2024, to March 31, 2025, with the system set to begin following the deadline for submitting the last quarterly progress report (QPR).
Since MahaRERA's establishment in May 2017, over 47,400 projects have been registered in Maharashtra, with more than 15,600 of these projects completed. To date, MahaRERA has received over 26,800 complaints and has issued orders in more than 17,900 of these cases.
MahaRERA's grading initiative, intended to offer homebuyers enhanced insights into real estate projects, has been placed on hold as the Real Estate Regulatory Act, 2016, does not grant regulatory authorities the power to grade projects. This decision aligns with both legal considerations and opposition from developer associations, like CREDAI, which raised concerns about potential malpractices. Although the Bombay High Court had inquired earlier this year about such regulatory measures, MahaRERA has opted to suspend the project. Since its inception, MahaRERA has registered thousands of projects, addressing a substantial volume of complaints and issuing numerous orders to regulate the real estate market effectively.
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