Experts say RERA must to be amended to protect flat buyers if law is to be scrapped
RERA delegates rule-making powers to states. Representation pic
The state government is keen to repeal the Maharashtra Ownership of Flats Act (MOFA) so that the Real Estate (Regulation and Development) Act (RERA)—a Central law—can prevail, but experts say the former cannot be revoked as, according to the rules of MahaRERA—which was approved by the state legislature in 2017—MOFA is a state Act that allows societies to opt for deemed conveyance if the developer fails to hand over the same.
“We must understand that the state has around 1.25 lakh co-operative housing societies registered with the state co-operative department, of which nearly one lakh societies lack conveyance or deemed conveyance to date. If MOFA is repealed, these one lakh housing societies will not be able to opt for deemed conveyance. Rule No. 9 of MahaRERA categorically states that where the developers/promoters have not given the conveyance for the purpose of executing the conveyance deeds, provisions laid under MOFA should be followed. This clearly shows that the MahaRERA rules have also considered the continuity of MOFA, a state Act,” said CA Ramesh Prabhu, founder-chairman of MahaSEWA.
“Further, there are no other provisions in MahaRERA rules to obtain conveyance in case the developer fails to provide the same as per Section 17 of RERA. Secondly, Section 88 of RERA has already provided that RERA is in addition to all existing state and Central laws. Therefore, there is no need to repeal MOFA,” said Prabhu. “Interestingly, those contemplating repealing MOFA have not understood that RERA itself has delegated rule-making powers to respective states as per Section 85,” he added.
‘Amend RERA to repeal MOFA’
Advocate Godfrey Pimenta of Watchdog Foundation said the repeal of MOFA would be an anti-homebuyer move as protection that is afforded to flat purchasers such as deemed conveyance; recourse against non-formation of co-operative housing society of the flat purchasers, which is the statutory responsibility of the developers; and criminal prosecution of errant developers would be snatched from them without any proper alternate remedy. "As such, the suggestion of the housing department to scrap MOFA would not be proper since as per the provisions of RERA, the application of other laws is not barred. If at all MOFA is required to be scrapped, RERA will be required to be suitably amended to afford protection which is available at present under MOFA,” he said.
Advocate Shreeprasad Parab, expert director, State Housing Federation, said, “On the one side the State is planning to repeal MOFA and thereby adopt a single Central legislation of RERA and on the other, RERA states under Section 88 that the provisions of the Act shall be in addition and not in derogation of the provisions of any other law for the time being in force. Also, Section 89 states that the provisions of RERA shall have an effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force.”
“RERA has been in force since May 1, 2016, so its provisions are applicable to buildings whose construction has been completed post-RERA. MOFA is applicable for housing societies registered since 1963 till the enactment of RERA. But with regards to the provisions of formation of society and transfer of its title, the provisions of MOFA are applicable for housing societies registered not only prior to the enactment of RERA but also after it came into force as Section 11 and Section 17 of RERA, which provides for the provisions of formation of an association of allottees and transfer of title respectively, are applicable only in the absence of local laws such as MOFA,” said Parab.
“The important part is that the state, which is thinking about repealing MOFA, has itself framed rules for the RERA Act and in Rule 9 (4) of the MahaRERA rules, the state has approved the entitlement of the legal entity to execute and register unilateral deemed conveyance under the provisions of MOFA. Thus, the state authorities in one department are unaware of the functioning of another part and thereby causing confusion or difficulties to the public at large. Thus if the state wants to repeal MOFA the state shall transfer the title in the name of all housing societies registered since 1963 till date and also in future incorporate the provisions of transferring the title at the instance the society is registered,” said Parab.
“We request the state to consider the rights of the public at large residing in housing societies by not repealing MOFA. Otherwise, the Maharashtra State Co-operative Housing Federation will have no other option than to file a public interest litigation in the high court to safeguard the rights of housing society members,” he said.
Advocate Vinod Sampat, founder and president of the Flat Users Residents Welfare Association, said, “RERA rules clearly stipulate the existence of MOFA. If any amendment has to be done, obviously it has to be done in the legislature. Similarly, if an amendment has to be done to RERA Act, it has to be done in Lok Sabha and Rajya Sabha.” He added, “It appears that some pressure is being put on the bureaucrats by powerful lobbies of builders on the basis of which the move is being proposed to repeal MOFA.”
The no of registered co-operative housing societies in state