Reveal mortgage status of Housing projects, Maharashtra builders told
The move is aimed at improving transparency and alerting prospective homebuyers about any mortgage or loans taken by the developer against the apartments they are about to buy – or the project itself.
This information is already available with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (Cersai), a central government agency for the purpose of operating and maintaining a registry of such data. The objective of Cersai, incorporated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi Act), is to prevent loan frauds, such as involving lending from different banks on the same property.
Cersai has data in respect of the security interests created from January 22, 2016 for scheduled commercial banks and, with effect July 1, 2016, for all other entities registered with it. From June 2017, it started registration of data on security interest in under-construction residential and commercial property.
The MahaRERA has now made it clear that homebuyers and allottees also need to be aware of such security interest created on real estate projects and apartments that they are interested in buying.
Many times, homebuyers purchase a property without the knowledge of the mortgage or loan status of the property and this later results in litigations and legal complexities.
If the developer has availed of a loan by mortgaging inventory or a few apartments and is not able to repay, banks would take charge of the property to recover their dues and this would affect the homebuyer.
These situations can be avoided with the new directive by the authority, as Cersai has the records of all properties against which loans have been sanctioned.
Realty developers will now have to submit a report from Cersai on security interests created in the real estate project along with the encumbrances certificate while registering the project with the authority.
In case no security interest has been created, the developer needs to provide an undertaking confirming the same. The developer is also expected to submit the Cersai report when it makes changes to the security interests created. According to the MahaRERA, the Cersai reports submitted need to be generated within 10 days before the date of submission.