MUMBAI: The BJP-led Mahayuti government is considering repealing the Maharashtra Ownership of Flats Act, a move experts warn could weaken the rights of housing societies.
Calling the proposed move “builder-friendly” in a real estate market already driven by developers, housing experts point out that scrapping MOFA would deprive thousands of housing societies of their right to ownership of land assigned through “deemed conveyance”, a conveyance deed under the Act. A housing society is provided deemed conveyance of their land via a legal process when the builder or land owner fails to provide conveyance within the legal timeframe.
The government is mulling the repeal of MOFA, enacted in 1963, on the urging of real estate bodies such as CREDAI-MCHI, which represents private developers in the Mumbai Metropolitan Region (MMR). Subsequently, the state cooperation department wrote to the cooperation commissioner, seeking his opinion on whether the Act should be repealed. The cooperation commissioner is expected to submit its report.
CREDAI MCHI first wrote to the government in November 2020. Along with other real-estate bodies, it has urged the state on many occasions to scrap the act. In its latest letter to the government last year, CREDAI-MCHI said the existence of two similar laws has been creating confusion and duality for developers.
“The Real Estate (Regulation and Development) Act 2016 (RERA) was meant to create a single, unified legal framework for real estate regulation, and there was no need for continuation of MOFA. Since RERA fully covers the functions and objectives previously governed by MOFA, we are requesting the government to repeal the latter so that the single legal regime for the real estate sector persists.”
Housing experts and flat owners’ associations have roundly opposed the move. Vilas Lele, president of the Pune chapter of the Akhil Bharatiya Grahak Panchayat, wrote to the chief minister two days ago, saying, “RERA does not safeguard the interests of flat owners and gives an advantage to builders and developers. RERA has been gradually diluted over the years to safeguard the interests of builders. It has led to hardship as many societies today are without the deemed conveyance facilitated by MOFA. Repealing MOFA will help builders but general flat owners will be left in a lurch.”
Former state housing secretary Sitaram Kunte said that repealing MOFA will affect thousands of societies waiting for deemed conveyance. “Though RERA covers most aspects, MOFA has provisions relating to the conveyance deed, which ascertains the ownership of the land to society. There are thousands of such societies in Mumbai and Maharashtra that are awaiting deemed conveyance. If MOFA is repealed, developers will benefit as ownership of these plots rests with them. Tenants may face issues in future due to lack of ownership of the plots on which the buildings stand,” Kunte said.
He said the government can repeal MOFA by introducing a provision relating to deemed conveyance in RERA Act. “But it is a central Act and deemed conveyance issues persist mostly in Mumbai and other large, dense cities,” he added.
Real estate bodies are pushing hard. Nayan Shah, former president of CREDAI-MCHI claims scrapping MOFA is “the need of the hour for effective governance”. He said, after RERA was introduced, MOFA is no longer required. Many provisions are overlapping, leading to complexities. If anybody feels that deemed conveyance cannot be effectively dealt with under RERA, a provision for this can be made under the legislation.”
Deepak Taware, cooperation commissioner, said the two legislations, MOFA and RERA, have overlapping provisions, while some provisions are contradictory. “Some real estate bodies are indeed demanding it. I will have to check if we have made any recommendations relating to this to the government.”