The Maharashtra Real Estate Regulatory Authority (MahaRERA) has issued a crucial clarification regarding the transfer of rights and liabilities of promoters under its earlier Circulars. This clarification aims to streamline processes for promoters wishing to change their organizational structure without seeking prior approvals from allottees.
The initial circulars, dated June 4, 2019, and July 23, 2021, outlined revised procedures for transferring or assigning a promoter’s rights and liabilities to a third party. The “Explanation” section of these circulars indicated that changes in internal shareholding or the organizational structure of a promoter—which do not impact obligations to allottees—would not require approval. This includes conversions of partnership firms to LLPs, transformations of private companies to LLPs, and changes in proprietorship through succession.
However, some promoters have sought further clarification, insisting that these changes should allow for corrections in the project records without needing approval from MahaRERA.
In response, MahaRERA emphasized that the phrase “shall not require the aforementioned approvals” means that the requirement for prior written consent from two-thirds of allottees does not apply in these cases. This interpretation clarifies that the changes outlined do not constitute a transfer of the real estate project to a third party, thus alleviating the need for extensive approval processes.
MahaRERA stated, “In instances referred to under the caption ‘Explanation,’ relevant documents and particulars must be submitted, duly signed by the incoming promoter, without the need for allottee consent.”
This move is expected to facilitate smoother transitions for promoters undergoing organizational changes while ensuring that the rights of allottees remain protected. The authority’s clarification aims to enhance operational efficiency within the real estate sector, aligning with the mandates of the Real Estate (Regulation and Development) Act, 2016.
As the real estate landscape continues to evolve, MahaRERA’s proactive approach in clarifying these processes underscores its commitment to fostering a transparent and efficient regulatory environment for all stakeholders.
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