The Maharashtra government’s new housing policy, approved in May 2025, proposes a separate, dedicated law similar to the Real Estate Regulatory Authority (RERA) Act specifically for redevelopment projects. This significant move aims to provide a much-needed legal framework for a sector not currently regulated by MahaRERA, addressing common issues faced by property owners.
Why a new law for redevelopment projects?
The Maharashtra Housing Policy 2025 highlights a crucial gap in the existing regulatory landscape. While the RERA Act of 2016 effectively governs new real estate developments, it does not apply to redevelopment projects. This regulatory vacuum has left countless homeowners vulnerable to project delays, financial distress, and stalled construction, as noted in the official Government Resolution (GR) issued by the Maharashtra Housing Department on July 23.
Redevelopment involves the demolition of old buildings, often two to seven stories high, and their replacement with modern, larger structures. Property owners in the original building receive bigger apartments in the new complex at no cost. The developer finances this by selling additional units for profit and acquiring floor space index (FSI) from the government, which also generates revenue.
However, the lack of legal oversight has led to widespread problems:
- Financial and Mental Distress: Delayed projects often force residents to stay in temporary housing or rely on developers for monthly rent, which can be inconsistent or stop altogether.
- Stalled Projects: Numerous redevelopment projects have been abandoned, leaving homeowners in limbo and facing severe financial and social hardship.
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MahaRERA’s Stance on Redevelopment
MahaRERA, the state’s real estate regulator, has consistently maintained that it lacks the authority to address grievances related to redevelopment projects. Since its establishment in 2017, MahaRERA has handled approximately 30,000 complaints but has dismissed those concerning redevelopment due to a lack of jurisdiction. A notable example from December 2022 saw MahaRERA rule that the redevelopment component of a project is not covered under the RERA Act, directing homeowners to seek legal recourse elsewhere.
Key Proposals of the New Housing Policy
Beyond the proposed RERA-like law, the Maharashtra Housing Policy 2025 includes several other critical initiatives:
- Reviving Stalled Projects: The policy outlines measures to restart delayed and stalled slum redevelopment projects, specifically promoting a cluster redevelopment model for enhanced efficiency and scale.
- Promoting Self-Redevelopment: The state is strongly encouraging cooperative housing societies to undertake their own self-redevelopment. To support this, a dedicated fund of ₹2,000 crore has been allocated, and a new cell will be formed to provide assistance to housing societies.
The new policy signifies a proactive step by the Maharashtra government to safeguard the interests of homeowners and bring greater transparency and accountability to the redevelopment sector. With the proposed new law, the state aims to create a more secure and regulated environment for all stakeholders involved in redevelopment projects.
