By Dr. Vasant Prabhu, Former Secretary – MahaRERA
The Government of Maharashtra has recently declared a new Housing Policy 2025, the first after nearly eighteen years since 2007. While this policy aims to solve problems in the housing sector and show a new direction, it unfortunately overlooks the serious issue of “lapsed projects” under MahaRERA.
RERA Act: The Background and Policy Changes
The Central Government introduced the RERA Act in 2016 to protect homebuyers and regulate the housing sector. The aim was to prevent cheating of buyers, ensure timely delivery of homes, and speed up complaint resolution. In Maharashtra, about 50,000 projects were registered — 15,000 of which are completed (30%). Of the remaining 35,000, around 13,000 to 14,000 projects have lapsed (about 40%), while 21,000 to 22,000 projects are ongoing.
Before RERA, the existing laws only dealt with adjudication and did not give regulatory power. RERA changed this by giving the authority both the power to judge and regulate. Now, every project must be registered with MahaRERA and all details must be made public on its portal, so buyers get full information. Promoters are required to update project progress every three months. Even with these rules, thousands of complaints are still filed with MahaRERA.
Major Complaints by Buyers
Most common complaints from buyers include exiting delayed projects and getting refunds, seeking interest and compensation for delays, not getting agreements on time, lack of parking, differences in promised and actual area, and structural defects. The most serious complaint remains the problem of projects lapsing.
What Does “Project Lapse” Mean?
A project lapses when the promoter fails to complete the project by the deadline promised during registration and does not get any extension. The promoter sets the completion deadline based on the project’s scope, available funds, and approval timelines. Following this deadline is mandatory because buyers invest based on it.
If a project is not completed on time, the promoter has two options: apply to MahaRERA for an extension, or complete the project within the agreed time. Section 6 of the Act allows MahaRERA to provide an extension of up to one year in case of natural disasters (like COVID). If the promoter needs more time, approval from 51% of flat buyers is required under Section 7(3). If the buyers agree and the promoter can complete the project within the extended period, MahaRERA may grant the extension. If the project still isn’t completed and buyers don’t agree to another extension, MahaRERA refuses it, placing the project in “abeyance” — meaning it lapses.
Details about lapsed projects are hidden from new buyers, bookings stop, and bank accounts are frozen, which halts all work. Many people have invested money in such stalled projects, leaving their futures uncertain.
Legal Remedies and Their Challenges
Section 7 of the RERA Act offers solutions for lapsed projects. If the promoter cannot complete the project, they can be removed and the project given to another promoter. If buyers have formed a society, it gets the first right to complete the project, possibly by appointing a new promoter.
Many promoters challenged this provision in court, arguing it affected their property rights. However, the Bombay High Court sided with MahaRERA, clarifying that MahaRERA does not take over ownership, but only allows the cost of completing the project to be recovered by selling unsold flats. Unsold flats are returned to the original promoter once work is finished. Thus, RERA helps ensure buyers get their homes.
MahaRERA can hand over projects to societies after removing the original promoter under Section 7. But often, societies aren’t formed or buyers don’t even know each other, making joint action difficult. Buyers sometimes file individual refund complaints, but if the promoter is bankrupt, they neither get their money back nor the home, leaving their situation unresolved. Unless buyers come together and form a society to file a complaint under Section 7, MahaRERA is helpless.
There are very few examples of projects revived through Section 7. In Pune, the “Sadafully” case of Kulkarni Developers is one such example: buyers formed a society, took over the project, and completed it using Section 7.
The Extent of the Problem
Around 13,000 to 14,000 projects in Maharashtra have lapsed. In many of these, over 50% of the work and investments have been made, meaning crores of rupees and thousands of buyers’ futures are at stake. The Maharashtra Government gave redevelopment guidelines in 2019, but there are no guidelines for lapsed projects. Under Section 8, only with government approval can projects be transferred from the original promoter to another. Without government participation or guidance, such projects cannot be revived.
Where more than 50% of the work is done and more than half of buyers have invested, it is ideal for the project to be handed to their society. By January 2025, about 13,000 projects had lapsed; the number now may be close to 15,000. If these projects can be grouped district-wise and, with help from promoters’ associations, completed, buyers will get their homes. For the rest, the government will need special schemes or guidelines, possibly through MHADA or similar bodies.
Steps to Prevent More Lapsed Projects
Preventing more projects from lapsing is critical. Every project is required to submit progress and fund usage updates every quarter. Buyers should check these and, if slow progress is noticed, take steps early, ideally with help from RERA’s compliance wing.
Buyers must be alert, form groups, visit the site themselves, and review promoters’ reports. Any issues should be brought to MahaRERA’s notice.
Even though MahaRERA has some control, it’s not practical to monitor all 50,000+ projects across Maharashtra. But if buyers remain aware, form societies after 50% occupancy, and closely track all activities, they can get their project completed with RERA’s help.
At the time of booking, buyers should verify whether the project or booked flat is already mortgaged to a bank or NBFC. Otherwise, if the promoter goes bankrupt, banks can use the SARFAESI Act to take over and sell the project, putting buyers’ money and future at risk. Loan takers may face paying EMIs even without possession. Cooperation is important in such situations.
What Buyers Should Do for Lapsed Projects
To prevent project lapses, buyers should get to know each other, form groups, establish a society if possible, regularly check quarterly reports, and notify MahaRERA if information is missing — this will greatly reduce the problem. Even if a project has already lapsed, all buyers should unite, form a society, and make a collective complaint under Section 7 to MahaRERA. As the law gives them the first right, if the promoter does nothing, MahaRERA can order a handover to the society. The society can then appoint a new promoter and complete the project, but this effort must be made by buyers themselves. Unity and a society are crucial for using the law’s power. MahaRERA should also give priority to such Section 7 complaints and help buyers.
If every buyer goes individually for a refund, they may get a RERA order, but it is unclear when the money will be paid and they lose rights to the project.
The Role of Government and MahaRERA
This is a serious and huge problem, likely to grow every year. With crores of rupees and thousands of buyers involved, the government needs to frame specific policy guidelines. The central government is also aware: In April 2023, a committee chaired by Amitabh Kant was set up to study such problems and suggest remedies. The central government, with SBI, has launched the “SWAMIH” fund to help financially viable projects, with some in Maharashtra on the list. However, a lapsed project, where ownership must shift, is handled differently. The new policy aims to start the “Maha Awas Fund” but only for affordable and inclusive housing.
This problem is so big that such funds alone cannot solve everything: thousands of projects have lapsed, showing the seriousness of the situation. MahaRERA should publish complete public data about lapsed projects, not just numbers — including project cost, expenses so far, percentage completed, bookings, and the percentage of buyers. If more than 50% of buyers are present, they should be helped to form societies and supported through consumer organizations. Promoters’ associations should be challenged to take on such projects district-wise, which will help resolve many cases of lapsed projects.
“In the end, thousands of customers’ lifelong dreams and savings are stuck in this issue. Solving it will require collective efforts from the government, MahaRERA, developer organizations, and most importantly, alert and organized customers and consumer associations. The law gives buyers rights, but to realize them, they must unite and fight for their claims. Without timely steps, the crisis will grow deeper.”
Thank you.
Dr. Vasant Prabhu retired as Joint Municipal Commissioner and was Secretary of MahaRERA for nearly eight years from its inception. He now runs “ReraCircle,” a social media platform to help and educate consumers about RERA. He and ReraCircle are available on his website, Instagram, and YouTube at drvasantprabhu.reracircle.
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