Table of Content
The Maharashtra government is considering repealing the Maharashtra Ownership of Flats Act (MoFA), a six-decade-old law that once formed the backbone of homebuyer protection in the state. According to reports, the move comes after continuous representations from developers’ bodies such as CREDAI-MCHI, who argue that with the advent of RERA, MoFA has become redundant.
The proposal has triggered an important debate in the real estate sector MoFA vs RERA on whether the repeal would streamline governance or leave a protection gap for homebuyers, especially in older housing societies.
Why the Maharashtra Government is Considering Repealing the MoFA
Enacted in 1963, MoFA was among India’s first state-specific real estate laws, created to protect homebuyers from fraudulent practices by builders. It made it mandatory for developers to disclose project details, maintain transparency in agreements, and hand over ownership to cooperative housing societies.
However, after the introduction of RERA (Real Estate Regulation and Development Act, 2016), developers began highlighting overlapping provisions between the two laws. The state cooperation department has now sought a report from the cooperation commissioner on whether the MoFA should be repealed, as suggested by CREDAI-MCHI.
Developers claim that maintaining compliance with both laws creates duplication and delays in project execution. The industry has been pressing for a repeal since 2020, when CREDAI first wrote to the government arguing that RERA has already subsumed the intent of MoFA.
Also Read: Telangana RERA Pulls Up Builders in Hyderabad for Project Delays, Poor Transparency
What is the MoFA Act?
The Maharashtra Ownership of Flats Act (MoFA), 1963, was enacted to safeguard flat buyers’ rights at a time when the real estate sector lacked transparency. It required builders to register projects, disclose layouts, and execute written agreements clearly defining the carpet area, total price, and possession date.
Some of its most impactful provisions include:
- Developers must use funds collected from buyers only for the specific project.
- Buyers must be given full ownership through the formation of a cooperative housing society.
- The law introduced unilateral deemed conveyance, enabling societies to obtain ownership of land and buildings even if the developer refused to cooperate.
Essentially, MoFA served as Maharashtra’s legal foundation for homebuyer protection long before nationwide regulations like RERA existed.
What is the RERA Act?
The Real Estate (Regulation and Development) Act (RERA), passed in 2016 and implemented in Maharashtra through MahaRERA in 2017, transformed India’s real estate sector by ensuring transparency and accountability.
Under RERA, every developer must register a project before advertising or selling units. They must disclose sanctioned plans, timelines, and financial details while regularly updating progress online. At least 70% of the funds collected from buyers must be used for that specific project to prevent diversion.
RERA also created a robust grievance redressal mechanism, allowing homebuyers to file complaints directly with the authority for quick resolution. The law is widely credited for improving project delivery timelines and rebuilding buyer trust in the real estate sector.
MoFA vs RERA: Comparing the Two Laws
|
Aspect |
MoFA (1963) |
RERA (2016) |
|
Jurisdiction |
State law Maharashtra only |
Central law applicable across India |
|
Objective |
Protect homebuyers and regulate builders |
Ensure transparency, accountability, and timely delivery |
|
Key Focus Areas |
Sale agreements, conveyance, and fund utilization |
Project registration, updates, and grievance redressal |
|
Regulatory Authority |
Registrar of Co-operatives / Local Authorities |
MahaRERA Authority |
|
Deemed Conveyance Provision |
Available under Section 11 |
Not explicitly included |
|
Applicability |
Projects before 2017 or unregistered under RERA |
Projects registered post-2017 under RERA |
While both laws aim to safeguard homebuyers, MoFA is a buyer-protection law focused on agreements and conveyance, whereas RERA is a sector-regulation law focusing on compliance and transparency.
The MoFA vs RERA debate largely centers on whether Maharashtra should retain both for comprehensive coverage or rely solely on RERA for uniform regulation.
Developer’s Argument: Simplifying Compliance
Developers across Maharashtra, led by CREDAI-MCHI, argue that having two parallel laws creates confusion and procedural hurdles. They claim that RERA already addresses key areas like fund management, project registration, and disclosure norms, making the MoFA unnecessary.
“RERA has made the sector more transparent and accountable, rendering MoFA redundant. If deemed conveyance needs to be addressed, it can be incorporated within RERA itself,” said Nayan Shah, former president of CREDAI-MCHI, in a statement to Hindustan Times.
Developers believe that repealing MoFA will simplify governance, reduce compliance duplication, and promote a more streamlined real estate framework under RERA.
Legal Experts’ View: Don’t Create a Regulatory Vacuum
Legal experts, however, warn that fully repealing MoFA could leave a protection gap for housing societies formed before RERA’s implementation.
Advocates point out that MoFA’s deemed conveyance provision remains vital for societies whose projects were completed before 2017 and are not registered under RERA. Without this, such societies could face difficulties in obtaining ownership of their land and buildings.
“MoFA’s deemed conveyance provision should continue to apply to societies not covered by RERA. For RERA-registered projects, the authority can execute conveyance, but repealing MoFA without substitution will create a vacuum,” said Trupti Daphtary, Mumbai-based advocate and solicitor.
In short, while RERA modernized the sector, MoFA still holds relevance for legacy projects and societies operating under the earlier regime.
Also Read: Third-Party Flat Buyers Have No Rights Once Developer Is Removed, Rules HC
What Lies Ahead: Repeal or Integration?
The Maharashtra government is currently evaluating options. While the real estate industry favors a complete repeal, legal experts recommend a hybrid approach merging MoFA’s critical provisions into RERA to ensure no protection gaps remain.
The cooperation commissioner’s report, once submitted, will guide the state’s final decision. If approved, Maharashtra could become the first state to officially phase out MoFA, aligning entirely with RERA’s regulatory framework.
However, any repeal must balance ease of doing business for developers with continued legal protection for homebuyers and societies.
Conclusion
The ongoing MoFA vs RERA discussion underscores Maharashtra’s effort to modernize its real estate legal system. While RERA has revolutionized the housing sector with transparency and accountability, MoFA’s legacy provisions still provide valuable safeguards for older projects.
As the state considers its next move, experts agree that consumer protection must remain central to any reform. Whether through repeal, amendment, or integration, Maharashtra’s decision on MoFA will likely set a precedent for other states navigating similar dual-law challenges.
Ans 1. The Maharashtra Ownership of Flats Act, or MoFA, enacted in 1963, was created to protect homebuyers in Maharashtra by ensuring transparency in agreements, proper fund utilization, and handover of ownership to cooperative housing societies. It introduced provisions like deemed conveyance, allowing societies to obtain ownership of land and buildings even if the developer did not cooperate.
Ans 2. MoFA is different from RERA because MoFA primarily focuses on buyer protection, sale agreements, and ownership transfer for projects before RERA. RERA, implemented in 2016, emphasizes project registration, timely completion, fund utilization, and grievance redressal for all new projects across India. While both safeguard buyers, MoFA deals with legacy protections, and RERA regulates the real estate sector broadly.
Ans 3. Maharashtra is considering repealing MoFA because the state government is evaluating repealing MoFA following requests from developer bodies like CREDAI-MCHI, who argue that RERA already addresses key protections, making MoFA redundant. Developers claim that removing MoFA will simplify compliance and reduce procedural duplication.
Ans 4. Legal experts warn that repealing MoFA entirely could leave a protection gap for older housing societies formed before RERA. Critical provisions like deemed conveyance remain important for societies not covered under RERA. Without MoFA, these societies may struggle to secure ownership rights.
Ans 5. For projects registered post-2017, RERA provides comprehensive coverage, including registration, disclosures, and fund management. However, for legacy projects, RERA alone may not address all issues like conveyance, meaning MoFA’s provisions still hold relevance unless integrated into the existing framework.
Ans 6. Developers argue that maintaining both MoFA and RERA creates confusion and delays. They believe that repealing MoFA and consolidating essential protections under RERA would streamline governance, making real estate operations simpler and more efficient.
Ans 7. The Maharashtra cooperation commissioner is preparing a report to guide the government’s final decision. Any repeal will likely consider a hybrid approach, keeping critical protections for older societies while aligning new projects entirely under RERA’s regulations.
Ans 8. Repealing MoFA could simplify compliance for developers and encourage faster project execution. However, it must balance regulatory ease with continued legal protection for homebuyers, particularly in pre-RERA housing societies, to avoid disputes and maintain trust in the market.
Ans 9. Legal experts suggest integrating MoFA’s critical provisions, like deemed conveyance, into RERA. This approach would modernize regulations while ensuring that older projects retain necessary protections without creating a legal vacuum.
Ans 10. The MoFA vs RERA discussion reflects Maharashtra’s effort to modernize real estate laws while protecting buyers. The outcome will set a precedent for how states manage overlapping regulations, balancing developer efficiency with consumer protection.