Mumbai: The Maharashtra government has begun examining whether the Maharashtra Ownership of Flats Act (MoFA), a law that has shaped the state’s housing market since the 1960s, should finally be retired. The discussion has surfaced at a time when officials believe that most of MoFA’s functions may already be covered under the Real Estate (Regulation and Development) Act, better known as RERA.
But while some developers welcome the idea of having a single, streamlined law, lawyers and housing activists aren’t so sure. They say repealing MoFA without a proper fallback mechanism could leave thousands of older buildings and cooperative housing societies in a tough spot.
Government Starts Preliminary Review
According to senior officials, the cooperation department has asked the state’s cooperation commissioner to take a close look at what MoFA’s repeal would mean in practice. Only after the report is submitted will the government decide whether this is a reform worth pursuing.
One official, who did not want to be named, said, “The intention is not to dilute protections. It’s really about figuring out whether two parallel laws are needed when RERA already covers much of the ground.”
Even so, the government appears aware that MoFA still holds relevance for older societies and long-standing disputes.
Why Does MoFA Still Matters?
MoFA was passed in 1963, in a very different housing environment. Mumbai was expanding rapidly and buyers often had no clarity about what they were paying for. Many builders operated without transparency, leaving buyers vulnerable.
Over time, MoFA introduced several essential safeguards such as:
- Mandatory disclosure of building plans
- Restrictions on how builders could use advance payments
- Formation of cooperative housing societies
- The widely used deemed conveyance system
The deemed conveyance provision alone has helped thousands of societies obtain land ownership when builders refused or simply disappeared.
“People often forget that MoFA is the only lifeline for older buildings. RERA doesn’t offer the same remedies,” said Advocate Shirish Deshpande, who has represented several societies in conveyance matters.
RERA and the Push for Modernisation
When RERA came into effect in 2016, it transformed the way new projects were regulated. In Maharashtra, MahaRERA has become the main authority for everything from project registration to dispute resolution.
Developers often argue that because:
- Projects must be registered before selling,
- Buyers can check layouts and financial details online, and
- 70% of collected funds must be placed in an escrow account,
MoFA is no longer needed for new construction.
A senior member of CREDAI–MCHI said, “Two different laws with overlapping rules only slow things down. RERA already takes care of transparency. MoFA is more suited to the older era of paperwork and manual processes.”
Legal Community Highlights Risks of MoFA Repeal
Housing lawyers are far less enthusiastic. Their biggest concern is the loss of the deemed conveyance mechanism. Without it, societies struggling with uncooperative or defunct builders might have no clear path to securing building ownership.
“Repeal is fine only if an equivalent safeguard is introduced. Otherwise, redevelopment and legal clarity will suffer,” Deshpande said.
Many societies formed in the 1970s, 80s, and 90s also rely on MoFA for disputes that predate RERA. Removing the Act without addressing these legacy issues could create a regulatory vacuum.
Impact on Redevelopment Projects
Cities like Mumbai and Thane have thousands of buildings waiting for redevelopment. Clear land titles are crucial for these projects, and any delay or confusion can set redevelopment back by years.
Societies without conveyance certificates may struggle to negotiate with developers, obtain bank loans, or even approve building repairs.
What’s the Likely Next Step?
The government is unlikely to take a sudden decision. Officials say they are considering several possibilities:
- Updating MoFA so it aligns better with RERA
- Transferring MoFA’s protections, especially deemed conveyance into RERA rules
- Consulting all stakeholders before making any amendment
For now, both laws continue as usual: RERA for new projects, MoFA for older properties and long-pending cases.
A senior official summed it up: “The idea is to modernise, not to remove the safety net for homebuyers.”
Sources: Hindustan Times, TOI
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