Unprecedented! In a first MahaRERA fines homebuyer for payment delay to builder

The Maharashtra Real Estate Regulatory Authority (MahaRERA) in an unprecedented case, has asked a homebuyer to pay penalty in the form of interest to the developer for delay in payment. This is contrast to usual directives from the authority to developers to pay penalty for delayed possession to a homebuyer.

According to a report in the Economic Times, SMP Namrata Associates, a developer, complaint against a home buyer for not making payment despite several demand letters.

The homebuyer had entered into an agreement with the developer to buy an under-construction apartment in Pune and the same was registered in August 2019. According to the builder’s complaint, the homebuyer had not made any payment despite several demand letters between August and December 2019.

The homebuyer then in January 2020 sent a legal notice to the builder for non-allotment of car parking space. This, along with an increase in GST charges, was cited by the homebuyer as reasons for not making payment to the developer, the business daily mentioned.

The developer then approached MahaRERA to seek its directions for cancellation of the agreement and forfeiture of the amount paid by the buyer at the time of booking.

The homebuyer had claimed that the complainant being a promoter cannot file a complaint against the allottee as there is no provision under RERA to file such complaint.

MahaRERA member, Vijay Satbir Singh opined that that the buyer being an allottee is liable to make payments in accordance with the terms and condition of the sale agreement, the publication mentioned.

The authority is of the view that in case of any default on the part of allottee or the promoter, either party would be entitled to seek interest for such a default as prescribed by the Real Estate (Regulation & Development) Act, 2016.

Source: https://www.timesnownews.com/business-economy/industry/article/unprecedented-in-a-first-maharera-fines-homebuyer-for-payment-delay-to-builder/663475

Bombay HC directs developer to pay Rs 5 cr for delay in property hand over


The Bombay High Court has directed real estate developer Renaissance Infrastructure to pay Rs 5.04 crore as compensation to a person who had not been handed over his property in Mumbai even after a delay over 80 months. A single bench of Justice S C Gupte on September 25 upheld the orders of the Maharashtra Real Estate Regulatory Authority and the RERA Appellate Tribunal that had ordered for the compensation amount to be paid to the purchaser.

The developer had approached the HC, challenging orders of RERA and the RERA Appellate Tribunal passed in January this year. As per the HC order, the purchaser bought six plots of land and some warehousing buildings from the developer in December 2009.

According to the sale agreement, the warehousing buildings and plots were to be handed over to the purchaser by March 9, 2010. The agreement also said that if the developer failed to hand over the properties on time, he would be liable to pay the purchaser a compensation amount at the rate of Rs 10 per sq ft per month.

When the developer failed to hand over the property, the purchaser approached the RERA that calculated the compensation amount as Rs 5.04 crore. The Renaissance Infrastructure challenged this order before the appellate tribunal, which asked the developer to deposit 50 percent of the compensation amount as per the RERA Act for entertaining the appeal.

But, when the developer failed to pay the pre-deposit, the appellate tribunal dismissed the appeal. The developer then filed a second appeal in the HC.

In his order, Justice Gupte dismissed the second appeal after holding that there were no infirmities in the orders passed by the RERA and the appellate tribunal. He held that the orders do not give rise to ”any substantial question of law for the consideration of the High Court”.

Justice Gupte said the Renaissance Infrastructure was liable to hand over the property as agreed to. ”Under this agreement, termed as an agreement for sale, the appellant (Renaissance) was bound to hand over possession of the suit premises to the respondent within an agreed period,” the high court said.

It directed the developer to pay Rs 5.04 crore to the purchaser within four weeks.

Source: https://www.cnbctv18.com/legal/bombay-hc-directs-developer-to-pay-rs-5-cr-for-delay-in-property-hand-over-7063901.htm

Should you keep paying EMIs after the builder misses possession date?


In a recent case involving a housing complex, Rivali Park Project in Borivali—now called Wintergreen—the builder contended that buyers making payments after the possession date has passed amounts to them agreeing to the delay. But the Maharashtra Real Estate Regulatory Authority (MahaRera) rejected the developer’s claim that the homebuyers had consented to the delay because they kept paying the instalments despite the chance in possession date.

“As per Rera guidelines, in case of a delay by the developer in completion of the project, buyers may opt for either cancelling the deal and claiming refund with interest, or to continue the agreement and seek compensation for the delay period,” said Mukesh Jain and Associates, a Mumbai-based law firm.

Even though MahaRera ruled against the builder in this case between CCI Projects Ltd. and homebuyers, saying buyers were eligible to receive interest payment for the delay period, this might not always be the case.

So, does it make sense to keep making payments after the promised possession date passes?

According to Anuj Puri, chairman, Anarock Property Consultants, you may not have a choice.

“Frustrated with the prolonged project delays, many buyers stop payments to developers. However, under the agreement to sale, sellers or developers are well within their legal right to cancel the booking if buyers fail to honour their part of the payment deal. Since each case may be different, a legal person must always advise on such matters,” he said.

Puri added that although MahaRera ruled in favour of the buyers, the exact variables may differ from case to case and not all such cases are equal in the eyes of the law. “Despite Rera being in place across the country, it is still largely work-in-progress. It is very much a case-to-case scenario. Moreover, respective states’ and union territories’ Reras have their own rules and regulations. Therefore, buyers should first seek local legal advice before taking any action,” he said.

According to Anuranjan Mohnot, MD and CEO, Lumos Alternate Investment Advisors Pvt. Ltd, Rera needs to be simplified to protect interest of homebuyers as well as developers.

“To avoid situations like this, Rera should introduce a milestone-based project review instead of just having one parameter of delays with respect to the possession date. This will help buyers to sense serious deviations at an early stage and they can approach Rera for taking proactive steps to avoid major delays,” he said.

Even in states with a fully functional Rera in place, moving the authority in favour of homebuyers might turn out to be a challenge. It can be very frustrating to have inordinate delays in getting possession of your house, but discontinuing payments can cause further complications. Consider the circumstances and seek legal advice to protect your interests as a homebuyer.

Source: https://www.livemint.com/money/personal-finance/should-you-keep-paying-your-emis-after-the-builder-misses-possession-date-11598349480123.html

Developer can’t add extra floor without nod of buyers: Maharashtra real estate regulator


In a major judgment, the Maharashtra Real Estate Regulatory Authority (MahaRera) disallowed a builder last week from carrying out the construction of an additional floor for his project at New Panvel without the consent of the buyers who already bought flats in the building.

The ruling is significant, as builders over the years modified plans and made additions to their existing constructions without taking the buyers into confidence, leaving the latter helpless, as they were promised a completely different structure.

The case was filed by four homebuyers – Deepesh Singh, Sujay Joshi, Nikhil Bare and Vaibhav Ballal – against Ms Neelkanth Constructions, for its Neelkanth Vihar Phase I project at New Panvel.

The complainants alleged that despite receiving the possession of their flats, the developer is yet to form the society and allot parking spaces to the occupants.

Responding to the complaint, Neelkanth Constructions said it wanted to utilise the unused floor space index (FSI). Accusing the complainants of ulterior motives, Neelkanth Constructions contented that after taking the possession of their flats, the buyers cannot stop it from consuming the FSI of the entire land.

The developer said they started the process of forming the society, but the complainants kept obstructing the respondent to extract money from the builder. Hence, the society formation process was stopped. The developer also said that if the complainants do not disrupt the process, it will go ahead with the formation of the society.

However, while hearing the case, the state real estate regulator cited section 14 of the Real Estate (Regulation and Development) Act (RERA) 2016, which mandated that any modification in the building plans, including the construction of additional floors, required the requisite consent of two-third of the allottees.

“With regards to the construction of additional floor to be constructed in the building, MahaRera directs that without the consent of two-third of the allottees, as prescribed under section 14 of the RERA, a respondent would not carry out any construction on site,” MahaRera said in its ruling.

According to housing activist Vinod Sampat, a builder loses his/her right of modification after the first apartment is sold.

“It is binding on the builder to obtain the consent of the buyer, as the latter has booked [the property] based on the plans given by the developer. Any additional construction would be a burden on the homebuyer, and hence, the consent [of the buyer] is required. Even the extra FSI offered later goes to the kitty of homebuyers,” said Sampat

Source: https://www.hindustantimes.com/mumbai-news/developer-can-t-add-extra-floor-without-nod-of-buyers-maharashtra-real-estate-regulator/story-UUiwdRUYGzpeUkIphqooVN.html

Coronavirus pandemic | UP RERA, MahaRERA adjourn hearings until March 31

With the coronavirus outbreak causing major disruptions, the Uttar Pradesh RERA and MahaRERA on March 17 said they have decided to adjourn the hearing of all complaints until March 31.

“Due to the coronavirus pandemic, UP RERA has decided to adjourn the hearing of all complaints listed between March 18 to March 31, 2020, both at the Lucknow headquarters and the NCR regional offices,” UP RERA said in a public notice.

Rescheduled dates would be communicated soon, it said.

Homebuyers and real estate developers wanting to list urgent matters may write to Secretary, UP RERA, at contactuprera@up-rera.in, it said.

UP RERA will again review the situation at the end of the month before deciding to resume the court, it said.

MahaRERA also said in a public notice that all cases before it and the adjudicating officer shall be adjourned until March 31.

RERA Bihar has also decided to postpone all hearings of cases scheduled from March 16 to March 31, 2020, it said in a public notice on its website.

“Haryana RERA has also decided to postpone the hearing of all cases from March 18 until March 31, 2020, Dilbag Singh Sihag, member HRERA, Panchkula told Moneycontrol.

“The project/agent registration process is completely online. MahaRERA staff is allowed to work from home till further orders,” the notice said.

Real Estate (Regulation & Development) Act, 2016 (RERA) came into effect from May 1, 2017, and Maharashtra was the first state to implement it by setting up MahaRera. Midwifed by two governments – UPA II and the NDA II – between 2009 and 2016, the legislation was necessitated by the growing misery of tens of thousands of harried homebuyers.

Source: https://www.moneycontrol.com/news/business/real-estate/coronavirus-pandemic-up-rera-maharera-adjourn-hearings-until-march-31-5042981.html

MahaRERA tells Alamdar Infrastructure not to sell flats to protect tenant

After the representatives of a real estate firm repeatedly failed to appear before the Maharashtra Real Estate Regulatory Authority (MahaRERA), the company has been restrained from selling, accepting bookings or transferring any unsold flat in a project at Marine Lines till a complaint by a woman tenant of the redevelopment project is resolved.

According to the complaint filed by Pervin Bahadurji, she had surrendered her premises for the redevelopment of Marine Palace off Princess Street at Marine Lines and was allocated flat no. 2101on the 21st floor of the building with carpet area 1221.39 sqft by developer Alamdar Infrastructure Pvt Ltd.

As per an agreement signed on March 15, 2017, she was supposed to get possession within 42 months from the first commencement certificate. The developer had also agreed to pay rent to her for temporary alternative accommodation but the rent was stopped from March 19, 2019.

Advocate Avinash Pawar, appearing for Bahadurji, submitted that the commencement certificate (CC) issued by the planning authority showed 20th floor as the last floor in the building, which means that the developer was not permitted to construct the 21st floor where the flat has been promised. The complainant requested MahaRERA to direct the developer to execute a supplementary agreement for allotting her a flat on the 20th floor of the building.

According to the registration page of Marine Palace project, the completion date is November 11, 2025. Its latest CC, issued on September 25, 2019, and valid till May 11, 2020, mentions that the projection has permission to go up to 20th floor. Out of the 54 flats in the building, only 8 have been booked, as per data uploaded by the developer on the MahaRERA portal.

MahaRERA member Bhalchandra Kapadnis noted that despite several notices served on Alamdar Infrastructure Pvt Ltd, the developer has not appeared for hearings to inform whether any unsold flat is available in Marine Palace which could be allocated to Bahadurji. He also took note of Bahadurji’s apprehension that unless the developer is prevented from selling flats, she won’t be allocated a flat.

Kapadnis directed the developer to appear before the authority on April 29, 2020, to disclose its unsold inventory.

Advocate Pawar said, “My client is the original tenant of the old building. Despite three hearings being scheduled, the developer did not appear before MahaRERA. If the developer has already sold all the flats, where will she go? This MahaRERA order will serve as adeterrent to builders.”

Source: https://realty.economictimes.indiatimes.com/news/regulatory/maharera-tells-alamdar-infrastructure-not-to-sell-flats-to-protect-tenant/74544804

High Court directs Sahyog Homes to deposit 60 per cent of a refund amount before tribunal hears the appeal

Upholding a Maharashtra Real Estate Appellate Tribunal order, the Bombay High Court directed a developer to deposit 60 per cent of a refund amount set by the tribunal, before the tribunal hears the appeal.

Justice Bharati Dangre in an order last week refused to interfere with a MREAT order dated December 13, 2019, directing Sahyog Homes to first deposit 60 per cent of Rs 82 lakh refund to be given to a homebuyer.

Section 43 (5) of Real Estate (Regulation and Development) Act states that a promoter may approach the appellate tribunal but it shall not entertain the appeal unless the promoter deposits a minimum of 30 per cent of the penalty or higher percentage as determined by the tribunal.

An aggrieved Sahyog Homes moved the high court against the MREAT order. When the court indicated that it would not like to interfere with the order, the counsel for the developer submitted that they will deposit 60 per cent of the amount within six weeks from the order. The court then disposed of the appeal.

This is not the first time that a developer has tested this RERA provision before the high court. In February 2019, ITMC Developers Pvt Ltd, the promoter of Sapphire 1 project in Kurla, had also moved court after the tribunal asked the developer to deposit 50 per cent of the refund amount imposed by MahaRERA. The high court had confirmed the tribunal decision and rejected the appeal.

Advocate Tanuj Lodha who represented homebuyer Krishna Agarwal in this case, said, “It’s important that section 43(5) of RERA is adhered to since it safeguards the interest of the allottees.” In September 2019, MahaRERA had held that even an unregistered Memorandum of Understanding (MoU) was evidence enough that the homebuyer had booked a flat and directed Sahyog Homes to refund Agarwal Rs 82.95 lakh with 10.75 per cent interest from 2012.

Agarwal had booked flat no 2202 in Verona Tower S2 in Oshiwara in 2012 and paid Rs 82.95 lakh out of the flat cost of Rs 89.41 lakh based on a MoU. The developer promised possession in the 35-storey tower by 2016, but in 2017 it unilaterally revised the possession date to July 31, 2022, the complaint said.

During the hearings, the developer claimed that the Agarwals were not homebuyers but investors and that the MoU was not registered and hence a void document. The company attributed the delay in construction to noncooperation by slum dwellers in the SRA component.

MahaRERA member Madhav Kulkarni observed that the appellate tribunal had held that even in the absence of a registered agreement, such complaints were maintainable. Stating that the developer should not have accepted such huge amounts when the project was not progressing as per schedule, Kulkarni held that the developer had failed to deliver possession of the flat as per agreement and directed it to refund the entire amount with interest. This order was challenged by the developer before the tribunal.

Source: https://mumbaimirror.indiatimes.com/mumbai/other/builder-to-pay-part-of-refund-before-tribunal-hears-case/articleshow/74431967.cms

MahaRERA directs developers to file source complaints if unable to register project


The Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed developers with occupancy certificate to file a source complaint on denial of project with sub-registrar offices for want of Rera enrollment.

“Once a developer files a source complaint, the authority will look into it at the earliest. If the authority decides that the project doesn’t require MahaRERA registration, the developer can approach the sub-registrar office and get the project registered,” a MahaRERA officials said.

The move brings relief to developers in the state as they were not able to register their projects with the sub-registrar office for want of RERA registration, though they had occupancy certificate ready.

As per the rules, projects with occupancy certificates are not required to register with MahaRERA. However, a revenue department circular issued in September last year insisted on registration of all projects with RERA before registering them with sub-registrar offices in the state.

Members of the Confederation of Real Estate Developers Association of India (Credai) too had raised the issue, saying that the RERA rules specifically mention that projects with completion/occupation certificate before the registration of sale deed were exempted from RERA registration.

Revenue minister Balasaheb Thorat had told TOI last week that he had directed all the departments concerned to issue clarity on the subject.

MahaRERA hearings to commence in Nagpur.

The MahaRERA, which presently conducts hearing in Mumbai and Pune, will extend the hearings to Nagpur too, MahaRERA officials said on Saturday. The move aimed at addressing the pending cases, they added.

Source: https://timesofindia.indiatimes.com/city/pune/maharera-directs-developers-to-file-source-complaints-if-unable-to-register-project/articleshow/74035664.cms

Maha RERA dismisses case in which a buyer sought full refund for not getting possession on time

The regulatory body dismissed a case in which a buyer sought full refund for not getting possession on time.

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has ruled that developers, before making any changes in the approved plan of a project, require the consent of two-thirds of allottees, and once consent is given in writing and the plan is amended, the allottees cannot change their mind.

The order was given last week by MahaRERA member Bhalchandra Kapadnis in the Sunil Wadhwani vs Pashmina Realty Ltd case.

Homebuyer Wadhwani had booked flat no C-701 in Pashmina Lotus located at Chandivali in Powai with the promise of possession on September 30, 2016. Wadhwani sought refund of his investment with interest under Section 18 of RERA contending that the developer failed to deliver by the agreed upon date.

During the hearings, Pashmina Realty Ltd, represented by chartered account Ramesh Prabhu, contended that the plans for 4BHK were considered unviable, and had to be revised to build 2BHK and 3BHK flats in the project. The plans were modified with the written consent of two-thirds of homebuyers, including Wadhwani, as mandated by RERA. Prabhu argued that Wadhwani’s complaint should be dismissed since he gave consent for re-planning under Section 14 (2) of RERA and cannot withdraw his permission now.

Prabhu submitted that Pashmina Lotus project was abandoned and the revised project was registered as Lake Riviera A & B wings with MahaRERA and developer EktaWorld was brought on board as development manager. He said Wadhwani has used the registration number of Pashmina Lotus to file his complaint though he is now an allottee of Lake Riviera and hence his complaint was not maintainable.

Advocates Siddhesh Bhole and Krupashree Sawant, appearing for Wadhwani, pointed out that their client had paid Rs 2.70 crore out of the flat price of Rs 2.76 crore and unless the entire sum is refunded, no subsequent agreement can be executed. Kapadnis observed that the consent under Section 14 (2) of RERA — involving two-thirds allottees — was given to the promoters and Wadhwani had shown readiness to pay Rs 20 lakh for additional carpet area.

“These facts, therefore, establish that on the consent of the complainant, the respondents have acted upon to their disadvantage and hence the complainant is ‘estopped’ under Section 115 of Evidence Act from withdrawing his consent and his status as allottee of the new flats,” Kapadnis said in his 8-page order.

He also said Section 62 of the Contract Act and the principle of novation of contract come into play in this case. Section 62 states that if the parties to a contract agree to substitute it with a new contract, then the original agreement need not be acted upon. It also says that novation requires that the old contract be replaced by a new contract.

Holding that novation of contract should be applied to this case, Kapadnis ruled that the amount paid by Wadhwani for flat no C-701 should be adjusted against the two new flats and directed both parties to register the agreement for sale for the new flats within one month from the order.

Source: https://mumbaimirror.indiatimes.com/mumbai/other/once-two-thirds-of-homebuyers-give-consent-no-turning-back-maharera/articleshow/73219860.cms

MahaRERA says industry units not under purview


The Maharashtra Real Estate Regulatory Authority (MahaRERA) has in a recent order held that industrial units or buildings part of such units would not come under the purview of the Real Estate (Regulation and Development) Act, 2016.

RERA adjudicating officer BD Kapadnis observed in an order that complaints related to industrial units could not be covered under the real estate statute.

The officer passed the order while hearing a case related to a complainant who had booked two units in an industrial facility, but failed to get their possession on agreed date of May 31, 2015. The complainant wanted to withdraw from the project and claimed refund of the amount with interests and compensation.

The RERA authorities said the Maharashtra Ownership Flats Act (Mofa), 1963, was applicable to the units and not the real estate law.

“It is clearly mentioned in the documents that the units are described as ‘estate units’ and they are of ‘big size’. It is mentioned in the documents that the units are agreed to be purchased for setting up industrial business of manufacturing and permitted under industrial location policy,” the RERA adjudicating office observed after going through the relevant documents related to the case.

“After looking into these legal aspects of the matter, the only conclusion that can be drawn is that Mofa is applicable to the premises used for carrying on any industry whereas the definition of the apartment does not include the industrial purpose. There remains no doubt in my mind that the industrial units are not included in the definition of apartment in RERA,” the officer added.

Source: https://timesofindia.indiatimes.com/city/pune/maharera-says-industry-units-not-under-purview/articleshow/73068802.cms