Experts welcome MahaRERA move to stop misuse of plinth Commencement Certificate

Builders currently obtain CC for plinth level but sign sale agreements for upper floor flats that are yet to be constructed

Experts practising in RERA have lauded the state housing regulator for directing developers to submit a declaration while getting a project registered, certifying the exact stage of the Commencement Certificate. Builders often dupe buyers by obtaining project registration based on CC for just "up to a plinth or zero FSI (floor space index)".

A circular dated June 7 (copy with this paper) by secretary MahaRERA states, "And whereas the flat buyers are unaware of this stage wise approvals, therefore, it has been decided to prescribe a declaration by the Promoter to certify the exact stage of the commencement certificate, so that flat buyers will be aware of the same."
Ramesh Prabhu, a CA and the founder of MahaSEWA, said, "Initially, when MahaRERA started implementing RERA from 1st May 2017, it used to take only Intimation of Disapproval issued by Competent Authorities. IOD is a conditional approval given to promoters by Competent Authorities."

Based on IOD

"Promoters used to register projects based on IOD with MahaRERA. Thereafter without taking CC, they used to book flats and also register the agreement with allottees. This way promoters continued to raise funds by pre-launch and also were accepting 80 per cent to 90 per cent advance amount by offering discounts. The promoters, having not complied with IOD conditions, were not able to get CC and the project used to be stuck," said Prabhu.

Acting on complaints of delayed possession, the regulator passed orders making CC a prerequisite for registration with MahaRERA. However, developers still managed to dodge responsibility by getting CC up to the plinth with Zero FSI.

For instance, Prabhu explained, developers would accept booking for flats on the 30th or 40th floor with the help of plinth CC and avoid paying any premium for use of FSI or TDR. Also, they didn't have to take any legal approvals.

After Ajoy Mehta recently took charge as the MahaRERA chairman, he promised to fix the illegal practice.

Prabhu said, "Justice will be done only when proper directions are given to file a declaration by promoters to MahaRERA that they will not book the apartments for which CC has not come. And get the directions issued by the state government that without CC of the particular apartments or floor, agreements should not be registered."

More clarity

Advocate Nilesh Gala, who practises in MahaRERA, said the circular will bring in more clarity. He said, "It [the circular] will clear doubts of purchasers about projects having valid permission towards construction."

Positive step

"It is a positive step. There will be utmost transparency. If steps are taken to ensure compliance of its orders then flat purchasers will be happy," said Advocate Vinod Sampat, founder president of Cooperative Societies Residents and Users Association. "If a comparative analysis of the timeline of a builder's ongoing projects as well as completed projects is given then it will result in more transparency," Sampat concluded.

MahaRERA Bar Association's secretary Anil D'souza called it a step in the right direction.

D'Souza said the regulator is trying its level best to bring in greater awareness and is gradually becoming a platform of authentic information on real estate projects. He added, "Since this circular seems to be for new project registrations only, it could be more beneficial if existing projects under MahaRERA too are directed to upload the approvals and permissions that they receive phase wise / wing wise/ floor wise, onto the MahaRERA portal. Flat buyers, especially in Mumbai, have an astute invigilator in MahaRERA and thus much to be grateful for!"