MoFA vs RERA: All you need to know about Maharashtra government’s plan to repeal the MoFA Act
The Maharashtra government is considering repealing the Maharashtra Ownership of Flats Act (MoFA), which aims to safeguard the interests of homebuyers and housing societies in the state of Maharashtra, according to a Hindustan Times report.
According to real estate developers, since the implementation of RERA, many provisions in the MoFA and RERA have overlapped, leading to complexities.
MOFA includes a provision relating to unilateral deemed conveyance, which legal experts say should continue to apply to societies not registered under RERA. For projects registered under RERA, the society can approach the RERA Authority for execution of the conveyance. To that extent, the repeal of MOFA would create a vacuum, as RERA does not contain an equivalent provision for projects completed prior to its commencement and applies only to those registered under it.
Unilateral Deemed Conveyance is a legal process that allows apartment owners (through their housing society) to get the ownership of the land and building transferred in their name without the builder’s cooperation, when the builder delays or refuses to execute the conveyance deed.
The government is considering revoking the MoFA, enacted in 1963, following representations from the real estate developers’ apex body, CREDAI-MCHI. The state cooperation department has written to the cooperation commissioner seeking his opinion on the proposed repeal, and the commissioner is expected to submit a report soon, the Hindustan Times report said.
According to the report, CREDAI MCHI first wrote to the government in November 2020. Along with other real estate bodies, it has urged the state on numerous occasions to repeal the act. In its letter to the government last year, CREDAI-MCHI had stated that the existence of two similar laws had created confusion and duality for developers.
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What is the MoFA Act
The Maharashtra Ownership of Flats Act, 1963 (MOFA Act) is a law that protects homebuyers in Maharashtra when purchasing flats from builders. It requires developers to clearly disclose details such as the layout plan, carpet area, total price, possession date, and the terms and conditions in a written agreement.
Under MOFA, developers must use the funds collected from buyers only for that specific project and cannot delay possession without valid reasons. The Act also ensures that buyers receive proper ownership rights and that a housing society is formed. In simple terms, MOFA safeguards buyers from unfair practices by builders.
What is the RERA Act
The Real Estate (Regulation and Development) Act (RERA), implemented in Maharashtra through MahaRERA, has been in effect since May 2017. The law regulates the real estate sector to protect homebuyers and ensure transparency. It mandates developers to register their projects with the authority before advertising or selling and to disclose approved plans, timelines, and financial details while regularly updating project progress on the MahaRERA website.
RERA also ensures that funds collected from buyers are used solely for the registered project and not diverted for other purposes. Additionally, it provides a dedicated platform for homebuyers to file complaints and seek timely resolution. In essence, RERA has made the homebuying process more transparent, accountable, and secure.
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What are developers demanding?
Developers have urged the Maharashtra government to repeal the MoFA Act, arguing that the Real Estate (Regulation and Development) Act, 2016 (RERA) already governs the sector. They say having two parallel laws creates duplication and confusion. According to developers, several provisions of MoFA now overlap with RERA, leading to procedural complexities and regulatory hurdles.
‘The need of the hour for effective governance. RERA was introduced in Maharashtra, and MOFA is no longer required. Many provisions overlap, 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,” Nayan Shah, former president of CREDAI-MCHI, told Hindustan Times.
What do legal experts have to say about the issue?
According to legal experts, fully repealing MoFA and relying solely on RERA could leave a protection gap for housing societies formed before RERA’s implementation.
They point out that MoFA specifically dealt with issues such as the formation of housing societies, conveyance of land to societies, and safeguarding of buyer funds from diversion, provisions that were practical and tailored to Maharashtra’s context. In contrast, RERA has a broader focus on project registration, transparency, possession timelines, and grievance redressal.
“In my view, the MOFA provision relating to unilateral deemed conveyance should continue to apply to societies not registered under RERA. For projects registered under RERA, the society can approach the RERA Authority for execution of the conveyance. To that extent, the repeal of MOFA would create a vacuum, as RERA does not contain an equivalent provision for projects completed prior to its commencement and applies only to those registered under it,” said Trupti Daphtary, an advocate and solicitor based in Mumbai.
