Real Estate Developers Need to Show Mortgage Status of Their Projects as per RERA

The MahaRERA has come up with a clause that requires all the real estate developers in the state to disclose the security interests they have created on residential projects that are registered with the authority. This decision has been made with the goal to increase transparency. Besides, prospective property buyers are likely to be aware of any loan or mortgage that the developer has taken against their apartments or the complete project that they are supposed to purchase.

The data is already available with CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest of India). This is an agency of the Central Government that operates and maintains the data registry. The goal of this authority is to prevent frauds related to loans, like the ones that involve lending for the same property from different banks.

CERSAI holds relevant data regarding the security interests that have been created since 22nd January, 2016 for scheduled commercial banks. Since 1st July, 2016, the body has been holding data for all other entities that have registered with the authorities. Besides, it started registering data on security interests for residential and commercial projects under construction since June 2017.

Presently, MahaRERA has clarified that allottees and property owners should be aware of the security interest that developers create on real estate projects as well as apartments when they intend to purchase them. Sometimes, property owners purchase the asset without knowing the loan status or mortgage on the property. Later, they need to face various complexities and litigations.

In case the builder has received a loan by mortgaging the apartment and fails to repay the same, the banks would recover the due amount from the homebuyer. However, with better transparency in this regard, these situations can be avoided. It will make the real estate transactions easier and transparent.