MahaRERA brings changes in Procedure for Transferring or Assigning Promoters Rights and Liabilities to a Third Party

MahaRERA brings changes in Procedure for Transferring or Assigning Promoters Rights and Liabilities to a Third Party
  • Friday 17th November 2017
  • Author: Yash Verma

Highlights

  • The Maharashtra’s Real Estate Regulatory Authority, MahaRERA, has brought some changes in the process of transferring a promoter’s rights and liabilities to a third party.

  • The promoter shall have to apply to MahaRERA with the consent of two-third allottees as on the date of application in the project to seek permission to transfer its rights and liabilities to a third party.

  • These requirements of procedures introduced by the MahaRERA shall be followed with an immediate effect starting from 8th November 2017.

The Maharashtra’s Real Estate Regulatory Authority, MahaRERA, has brought some changes in the process of transferring a promoter’s rights and liabilities to a third party. These changes have been made due to repeated demands from the builder’s communities to amend these rules. A circular was notified by the MahaRERA Authority on 8th November, ordering for an immediate effect of these changes.

The previous version of the provision stated – “The promoter shall not transfer or assign his majority rights and liabilities in respect of a real estate project to a third party without obtaining written consent from two-third allottees, except the promoter, and without the written approval of the Authority.”

These restrictions have not been completely lifted however, they have been modified for a few conditions.

New amendments                             

The promoters from now onwards shall not require these approvals for changes in their shareholdings or organization that does not affect the obligations with respect to the allottees. The promoters from now on will also not require these approvals for conversion of the promoter entity of –

  1. Partnership Firm into LLP / Private Limited Company or
  2. Conversion of Private Limited Company or unlisted Co. to an LLP or otherwise
  3.  Proprietorship change by succession to legal heirs

Cases where the promoter wishes to transfer his rights and liabilities to a third party, the following procedure shall be followed –

The promoter shall have to apply to MahaRERA with the consent of two-third allottees as on the date of application in the project to seek permission to transfer its rights and liabilities to a third party. The promoter shall have to write to the Secretary of MahaRERA on - secy@maharera.mahaonline.gov.in. On receipt of such application, the secretary shall initiate action through the legal wing who would take necessary steps to obtain approval of MahaRERA, which may include scheduling a hearing. MahaRERA shall thereafter pass an order within one month of filing of the application, of either granting approval to such application for transfer or reject such application for transfer.

After receipt of the approval and within seven days of completion of the transfer, the new promoter shall then apply for necessary corrections in the existing registration details. The required supporting documents should also be uploaded by the new promoter.

While making the application for correction, the new promoter shall upload a registered undertaking stating that they shall comply with all the obligations under agreement of sale executed by the previous promoter with respect to the Allottees of the project and has assumed all the obligations of the previous promoter under the Act, on the website of MahaRERA.

These requirements of procedures introduced by the MahaRERA shall be followed with an immediate effect starting from 8th November 2017.

The Real Estate Regulatory Authority of Maharashtra, MahaRERA, has among all the states done most number of registrations of ongoing projects. A total of around 13,000 projects have been registered by the Authority so far. 

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