MahaRERA Introduces First-Ever Time-Bound Recovery Framework to Claim Compensation from Non-Compliant Developers

Mumbai, December 7, 2025 — The Maharashtra Real Estate Regulatory Authority (MahaRERA) has reportedly unveiled a groundbreaking standard operating procedure (SOP) aimed at streamlining the recovery of compensation from defaulting real estate developers. According to official sources, this landmark initiative marks the first time the regulatory body has formalised such a comprehensive enforcement mechanism in the state.

The newly introduced framework is said to offer homebuyers protection under RERA through a legally enforceable and time-bound pathway to seek redressal in cases involving delayed possession, construction defects, or missing amenities. Reports indicate that the SOP has been implemented following specific directions from the Bombay High Court, signalling a major regulatory transformation in Maharashtra's real estate sector.

What the New Recovery Framework Entails

Industry observers have noted that the newly notified SOP addresses longstanding concerns surrounding the inconsistent enforcement of MahaRERA orders across various districts. The structured procedure is expected to bring clarity, predictability, and accountability to a process that has historically been plagued by delays and administrative bottlenecks.

This development follows MahaRERA's recent initiatives, including freezing of real estate project accounts for non-compliance, demonstrating the authority's increasingly aggressive stance against errant developers.

Step-by-Step Enforcement Timeline Under the New SOP

According to available information, the compensation recovery process will follow a structured and time-bound sequence as outlined below:

A senior MahaRERA official reportedly stated that the SOP removes ambiguity and standardises enforcement across the state, ensuring that defaulting developers face timely and escalated consequences for their actions.

Significant Benefits for Homebuyers

The new procedure is being viewed as a significant win for homebuyers who have often struggled to enforce favourable compensation orders despite receiving them. Property buyers looking to understand possession and buyer rights under RERA will find this framework particularly beneficial.

Key Advantages for Property Buyers

• The SOP defines exact steps and timelines for enforcement, eliminating uncertainty in the recovery process
• Administrative burden on buyers is expected to reduce significantly under the new framework
• Asset disclosure has been made mandatory, reportedly preventing false claims of insolvency by developers
• Authorities are now empowered to attach bank accounts, properties, and investments of defaulting builders
• Court-ordered civil imprisonment can be initiated in cases of wilful default

Recent rulings, such as the MREAT ruling allowing refunds without registered sale agreements, have already strengthened buyer positions, and this SOP is expected to further enhance confidence in MahaRERA's regulatory powers.

Stricter Compliance Requirements for Developers

Real estate developers in Maharashtra now reportedly face a strict 60-day deadline to honour compensation orders issued by MahaRERA. Failure to comply within this window could result in severe consequences.

Potential Penalties for Non-Compliant Builders

• Mandatory disclosure of all assets, including movable and immovable properties
• Freezing of bank accounts and seizure of properties belonging to defaulting developers
• Escalation of the matter to civil courts for further legal proceedings
• Civil imprisonment of up to three months for wilful non-payment or asset concealment

Sources indicate that this marks the first time imprisonment has been formally integrated into MahaRERA's recovery workflow. Builders are advised to maintain transparent practices to avoid legal complications under the new regime.

Broader Impact on Maharashtra's Real Estate Sector

While the SOP raises the bar for compliance and tightens enforcement mechanisms, industry experts have noted that its effectiveness will depend significantly on the operational capacity of district collectors and civil courts, which often face resource constraints.

The move also aligns with other recent regulatory initiatives, including MahaRERA's verification of OCs for lapsed housing projects and the Bombay High Court's directive on certificate verification integration.

Some analysts have expressed concern that smaller developers dealing with cash flow issues may face additional challenges under the new timelines. However, the move is largely being welcomed as a critical step toward regulatory maturity in the sector.

A real estate policy analyst reportedly observed that the SOP sends a clear signal to developers that non-compliance is no longer a grey zone. With defined legal consequences now in place, the risk of defaulting on buyer compensation has increased substantially.

Institutional Accountability Takes Centre Stage

With this first-of-its-kind enforcement protocol, MahaRERA has taken a decisive step toward institutionalising accountability in Maharashtra's real estate market. By codifying recovery procedures and introducing civil penalties for non-compliance, the authority is reportedly sending a strong message that developer defaults will no longer go unchecked.

This initiative complements Maharashtra's new housing policy targeting 3.5 million affordable homes and RERA's role in driving housing completions across India.

For homebuyers across the state, this SOP reportedly marks a milestone in regulatory empowerment, making justice not only accessible but also enforceable through a clear, time-bound process.

Disclaimer: This article is intended for informational purposes only and should not be construed as legal or investment advice. Readers are advised to verify all information independently and consult qualified professionals before making any property-related decisions. Ghar.tv does not guarantee the accuracy or completeness of the information provided herein.