Category: HI & RERA

Setting aside an order by the MahaRERA chairperson, the Maharashtra Real Estate Appellate Tribunal (MREAT) observed that the developers continued to skip mentioning the date of possession of flats in their allotment letters given to home buyers even two years after RERA came into place. The tribunal has asked MahaRERA to view this seriously.

“This requirement, envisaged by RERA, is flouted more often than observed which needs to be viewed seriously by the authority,” observed a tribunal bench, comprising Shriram Jagtap, member judicial, and SS Sandhu, member administrative, in a November 11 order. The bench also slammed the practice of developers not sharing a draft Agreement For Sale (AFS) containing the terms and conditions prior to asking for payment for execution of the agreement.

The tribunal also took strong exception to the Authority’s “over emphasis” on the view that home buyers need to seek reliefs under Section 18 on or before the Occupancy Certificate (OC) is obtained, and that they were not entitled to refunds under the section if they file the complaint after the OC is obtained by the promoter. MahaRERA had backed the promoter’s contention that irrespective of the delay in granting possession, once the OC is obtained or possession offered, Section 18 would not apply.

In this case, the home buyers had filed the complaint on March 17, 2021, after the promoter had obtained the OC by February 9, 2021.

The observations came on appeal filed by senior citizens, Bijon and Shanta Talukdar, who had booked a flat in Eirene project by promoter Dhruva Woolen Mills Pvt Ltd. Booked under the 9:91 scheme, the couple had paid ₹9.44 lakh and the remaining 91 per cent was payable at the time of possession.

Though the email communication between the parties indicated June 2020 as the date of possession, it was not specified in the letter of allotment (LOA) issued by the promoter on June 19, 2019 – on the MahaRERA portal, the promoter mentioned the possession date as December 2019, with a grace period of six months. Thereafter, the promoter could not hand over possession by June 2020, thanks to the lockdown; and in the intervening period MahaRERA allowed extension of possession date till December 2020.

Meanwhile, the home buyers served notice on the promoter on August 24, 2020, to hand over possession within 15 days, failing which their money be refunded with interest. They reiterated the demand in another legal notice dated January 21, 2021. Thereafter, the promoter informed the couple that OC had been received on February 9, 2021, and asked them to take possession by paying the balance 91 per cent amount as agreed.

As the demand for refund with interest was declined, the home buyers had filed a complaint seeking refund of the amount under Section 18 for delay in possession. MahaRERA had dismissed the complaint after agreeing with the promoter’s contention. Aggrieved by the order, the home buyers had challenged the September 7, 2021, order before MREAT.

The tribunal held that the promoter had replied to the legal notice only on February 26 (after the OC was obtained on February 9) declining to refund their investment, and therefore, there was no undue delay in homebuyers approaching MahaRERA seeking relief under Section 18.

The orders by MREAT can be challenged by aggrieved parties before the Bombay High Court in second appeal on a point of law.

Source: https://www.hindustantimes.com/cities/mumbai-news/buyers-can-seek-refund-if-builder-skips-possession-dates-tribunal-101668538140352.html

As per RERA registration, 139 projects in the Pune district, which were not completed within the stipulated time and did not get an extension, have been declared as lapsed projects by Maharera.

Maharera will issue show-cause notices to these projects. As per Sections 7 and 8 of the RERA Act, the projects can be taken up through the Consumer Co-operative Housing Society. Developers have been given a deadline of one month.

The builders had promised to complete the project in 2022 but did not complete it. RERA registration is mandatory for developers and their projects. As per this registration, the developers must complete the project within the time given by Maharera to complete the project. Also, there is a provision for strict action against the developers who violate this rule.

Projects are extended if the developer submits 51 percent customer consent. But even for that, the developers are not coming forward. It hits the customers hard. So now Maharera has decided to take action against such developers. These developers have been given one month to make their case and explain why the project has been stalled. He also said that action will be taken as per Sections 7 and 8 of RERA against the developers who do not come forward or give a satisfactory reply within this period.

You can check the details here: https://maharera.mahaonline.gov.in/Site/1128/Lapsed-Projects

Source: https://www.punekarnews.in/rera-declares-139-projects-as-lapsed-declare-one-month-deadline/

The Maha Real Estate Regulatory Authority (RERA) suspended registrations of 52 builders from Kalyan–Dombivli Municipal Corporation (KDMC) limits on Monday. The list has been uploaded on the civic body’s official website.

This move by RERA comes after KDMC had registered an FIR against 27 developers for forgery and cheating last week. FIRs against 39 others are underway.

The civic body has said that the builders had produced fake documents to acquire the RERA certificate.

“We have uploaded the list of suspended builders from KDMC on our website,” said Vasant Prabhu, secretary, RERA.

All real estate projects registered with RERA are provided with a certificate having a unique registration number. It has all the information about the property. A developer, builder or a property agent cannot advertise, book or sell real estate without obtaining the RERA certificate.

The KDMC has informed that these 27 developers had forged the required documents to procure the RERA certificate.

This action by the civic body comes after a city-based architect and social activist, Sandeep Patil, 43, filed a Public Interest Litigation (PIL) in the Bombay High Court in 2021. He drew the court’s attention towards the builders who made fraudulent documents for the purpose of registration of flats/ shops in illegal buildings because of which innocent people were cheated throughout Maharashtra.

Patil had raised the matter of 66 builders and demanded action.

“While I have raised the name of 66 builders only 52 have been suspended by RERA. I checked the list online and found all the builders are those mentioned by me in my complaints. What about the remaining 14 builders? Also, suspension will not help as it is temporary – a proper legal case should be done in this matter. I will follow up with this too,” said Patil.

“The Dombivli police is working on registering cases against 39 more builders shortly,” added Patil.

The cases registered at the police station are under Sections 420, 465, 467, 468 and 471 of the Indian Penal Code.

Disha Sawant, assistant town planner KDMC, said, “This suspension is done by the RERA so we cannot comment on it. Meanwhile, KDMC is carrying out its own investigation.”

Source: https://www.hindustantimes.com/cities/mumbai-news/rera-suspends-52-builders-from-kdmc-101664827518793.html

Over 50 percent of the total projects registered as ‘ongoing’ with the Maharashtra Real Estate Regulatory Authority (MahaRERA) when the regulator came into being in 2017 are yet to be completed, according to data accessed by Moneycontrol under the Right To Information (RTI) Act.

About 13,246 projects were listed as ‘ongoing’ in 2017, of which 6,557, or about 49.5 percent, have been completed.

A total 36,461 projects, including the ‘ongoing’ ones, have been registered since the inception of MahaRERA, of which 9,637 have been completed.

About 3,080 completed projects are new projects with the rest being ‘ongoing’ projects.

The data reveals that out of the total completed 9,637 projects, about 1,897, or 20 percent, were completed only after getting an extension. These include 1,655 ongoing projects and 242 new projects.

Maharashtra was one of the first states where rules and all sections of the Real Estate (Regulation & Development) Act, 2016, were notified and came into force on May 1, 2017.

What is an ongoing project?

When the RERA Act came into effect, the MahaRERA had asked all new and ongoing projects to register without which they could not market, sell or get approvals.

All ongoing as well as under-construction projects which had not received completion certificates had to get registered with the regulatory authorities within three months, i.e, July 31, 2017.

Further, projects with a plot size of a minimum 500 square metres or eight apartments also came under the purview of the Act. MahaRERA had also levied a penalty on developers of ongoing projects who did not adhere to the deadline set for registering the ongoing projects.

What is a new project?

A new project that is starting afresh and has come into existence after the MahaRERA became effective on May 01, 2017. All such projects launched after RERA Act came into effect have to register their projects with MahaRERA in order to market or sell units in them.

As per the data, about 63 percent or 23,215 projects out of the total 36,461 registered, as of June 2022, are new projects.

What’s the solution for the completion of ongoing projects?

Gautam Chatterjee, retired IAS officer and first chairman of MahaRERA, said, “We got these 13,000 ongoing projects registered within a period of two to three months after MahaRERA got into action from May 2017. The whole point is these are the legacy projects that are stuck due to several problems for whatever reasons they might be. Around 4,500 projects that are lapsed but we need to look at around 2,000 odd projects where the buyer’s money is involved and try getting them back on track.”

Chatterjee added, “We have to make efforts to ensure that these projects are completed by imposing sections 7 and 8 of RERA Act that allow taking over of the projects that are stuck. I know that the MahaRERA has recently launched a vertical for stalled and lapsed projects where they need to be analysed and measures should be taken to ensure they are completed.”

Chatterjee said that one of the few measures could be involving all the stakeholders, including financial institutions, in taking the project ahead apart from the association of allottees when they take over the project. But this would require amendments in the Act, and they should be done after carefully analysing the projects that have lapsed or are stalled.

A senior MahaRERA official not wishing to be named said, “It is true that the majority of the stalled projects are those that were registered as ongoing projects. We are in the process of appointing investigators who will go on projects where we suspect that a significant amount of the money is spent, but no groundwork is evident. The plan is to get things moving in the coming months. Out of the total lapsed projects, we are aiming and focusing on 900 odd projects where the pushing by the regulator might work in favour of the buyers.”

Lapsed projects vertical

MahaRERA chairman Ajoy Mehta on June 22 announced the formation of a dedicated vertical on lapsed or stalled real estate projects to get these projects moving by either the existing developer taking it ahead or buyers taking over the project or by roping in a new developer.

“We have verticals for grievances, complaints, registration, adjudication, and administration. Similarly, this vertical will be for stalled projects. If we have to look essentially at stalled projects, out of 4,500 stalled projects, 1,500 do not have bookings. Out of the 3 lakh apartments that are stuck, 1.28 lakh do not have bookings. My focus is on stalled projects where there is money from homebuyers involved. The approximate worth of stuck projects is expected to be Rs 78,000 crore. We will tackle money from banks and financial institutions at a later stage,” Mehta was quoted as saying.

When is a real estate project declared lapsed?

Every project registered by a developer with MahaRERA is given three to four years for completion, which is considered a reasonable time, followed by the issuance of a registration number for the project.

A search on the MahaRERA website using this number will throw up all details relating to the project. The registration number is to be published by the developer in every advertisement or promotion activity related to the project.

However, a project is termed as ‘lapsed’ when the timeline given for completion is not met, and the developer has not applied for an extension. Once the registration of the project is declared ‘lapsed’, the developer cannot advertise, market, book, sell or offer to sell, or invite persons to invest in these projects. Such projects cannot be registered by the registrar of the revenue department.

Source: https://www.moneycontrol.com/news/business/real-estate/mc-exclusive-over-50-projects-tagged-ongoing-since-maharera-still-await-completion-9206841.html

The Maharashtra Real Estate Regulatory Authority (MahaRERA), in a recent order, directed the developer of Kalpataru Avana, a luxury real estate project in central Mumbai, to deduct 2 percent of the total price of flats, and not 10 percent, for cancellation of booking by homebuyers.

The ratio mentioned in the letter of intent (LOI) signed between homebuyers and Kalpataru Limited, the developer, was 10 percent. MahaRERA said the proportion mentioned in one of the clauses of the LOI appears to be unreasonable.

MahaRERA received six separate complaints from individuals and a company in August 2020, seeking directions to the developer to refund the entire amount paid by them along with interest and compensation under section 18 of the Real Estate (Regulation & Development) Act, 2016.

The complainants said they had not signed a sale and purchase agreement, but an LOI in 2015 which was effectively an allotment letter under settled case law.

Although no date of possession was mentioned, a period of three years had been cited as a reasonable date for completion of projects in previous rulings, the homebuyers said.

They said they had informed the developer they wished to withdraw from the project and requested a refund along with interest and compensation in July 2020. The developer got the occupation certificate for the flats in October 2021.

In response, Kalpataru filed six complaints in February 2021, seeking directions from MahaRERA to the buyers to execute an agreement for sale and purchase under section 13 of RERA and also to pay the remaining amount due to the developer with interest.

MahaRERA did not find merit in the complaints, saying the buyers had already decided to withdraw from this project and approached the authority for cancellation of their booking, alleging violation of various provisions of RERA.

MahaRERA said the developer had filed complaints after the buyers had filed theirs. In such a scenario, the buyers cannot be forced to remain in the project and execute the agreements, it ruled.

“Clause no. 20 of the said LOIs mentions the forfeiture of 10% of the total consideration value of the said flats. However, … the said booking application form provides that upon cancellation of the said flats, the promoter is entitled to forfeit 2% of the total consideration of the said flats,” MAHARera said.

It added: “Such forfeiture clause as mentioned in the LOIs appears to be unreasonable, after commencement of RERA and even it does not seem to be in consonance with the recent MahaRERA Order No. 35 in August 2022, issued with respect to the prescribed format of allotment letter, which permits the promoter to forfeit 2% amount.”

In August 2022, MahaRERA issued an order prescribing the number of days and amount that can be deducted in case of cancellation of a booking. According to the order, no amount can be deducted for cancellation within 15 days of booking, 1 percent of the cost of the unit for cancellation between 16 days and 30 days, 1.5 percent between 31 days and 60 days and 2 percent after 61 days.

An email query sent to Kalpataru elicited no response.

“This ruling will be of assistance to allottees if a higher rate of deduction for forfeiting the consideration amount is mentioned in the allotment letter,” advocate Trupti Daphtary said.

Advocate Nirav Jani, a partner at Vigil Juris, said: “MahaRERA has further legislated contractual terms between the parties wherein the allottee (home buyer) will only be penalised up to 2 percent of the consideration in case of default by allottee as well. The ruling rewrites the contract previously executed between the parties. This may be an impediment for parties to enforce clauses which have been agreed between the parties and arrive at a commercial understanding.”

Source: https://www.moneycontrol.com/news/business/real-estate/maharera-orders-developer-to-deduct-2-not-10-of-the-price-of-apartment-for-cancelled-booking-9138651.html