INTRODUCTION
The Real Estate (Regulation and Development) Act, 2016 ("RERA Act") came into force on 1st May 2017 in order to regulate and promote the real estate sector.
Seven years later, out of the total 23,423 complaints received by MahaRERA, 67% of the complaints i.e. 15,802 complaints have been decided as per the statistics provided on MahaRERA website. Numerous significant decisions and rulings have aided various stakeholders which have helped to protect their respective rights and promote equality between the parties.
Distribution of complaints received with MahaRERA
This abstract encompasses analysis of various orders passed by Hon'ble Maharashtra Real Estate Appellate Tribunal ("MREAT") to basically understand what are the key issues that are giving rise to disputes between the developer and an allottee.
Unlike the orders passed by MREAT, orders passed by Hon'ble Maharashtra Real Estate Regulatory Authority ("MRERA") are not easily accessible and can be accessed only by going into the project details. Orders passed by MREAT are easily accessible on RERA website for scrutiny of the data. Also, the orders passed by MREAT, in the absence of a second appeal filed before the Hon'ble High Court have technically attained finality. Additionally, the number of orders appealed/challenged from MRERA to MREAT and from MREAT to High Court are diminishing. Therefore, it becomes imperative to scrutinize and carefully examine the orders passed by MREAT to identify the typical issues which are resulting in the dispute between the allottees and developers/ promoters.
Upon reviewing and analysing various orders passed by MREAT over the last year ("Data"), we understand that a lot of jurisprudence has developed on various questions such as delay in handing over possession, blanket consent vs. informed consent, misrepresentation etc. Our analysis of the Data shows that the most common point of issue between the allottee and the developer is that of delayed possession which comprises of almost 90% of the orders analysed followed by consent by allottee which comprises 5%, then misrepresentation by promoters which comprises 3% and others which comprises of 2%.
Main Issue between Allotees and Promoters
This abstract is a prelude of the RERA Report which would cover detailed analysis and representation of recurring keys issues/challenges faced by the stakeholders before the MRERA and MREAT
DEMYSTIFYING THE CHALLENGES FACED BY STAKEHOLDERS BEFORE RERA AUTHORITIES
DELAYED POSSESSION
Some of the key points relating to delayed possession which are the outcome of our analysis are as follows:
- No compensation for allottees due to delay in delivery of possession if allottees opt to continue in the project and will only get interest for delayed period1.
- Promoter may construct additional floors, but this does not extend the deadline for possession of the original units agreed upon with the allottees. Promoter will still be bound to handover possession as per the original date2.
- Once it is established that Promoter has failed to handover possession even after the agreed extended date by virtue of it becoming impossible then the cause of action immediately arises for allottees to take recourse to the remedies provided under Section 18 of the RERA Act without even waiting for the expiry of the agreed extended date3.
- Merely obtaining of occupation certificate is not enough. If the occupation certificate is obtained beyond the date agreed for possession, promoter is still liable to pay interest under Section 18 of RERA Act.4.
- Purchasers can change reliefs prayed for in the complaint from seeking possession to refund with interest, if due process of law is followed5.
- In the event of expiry of validity of project registration or even in the event of suspension or also in case of revocation/ lapse of the project registration, Section 18 will continue to be applicable and rights so accrued to the complainant interalia for refund due to delay will remain unaffected6.
CONSENT
Previous consent of the concerned allottee is mandatory before undertaking any change in the agreed plan. In case of any change in the layout and specification of the buildings, obtaining prior written consent of at least 2/3rd of the allottees is a pre-requisite7.
MISREPRESENTATION
- If the allotees are not in possession of the flats and the developer had failed to provide amenities as promised by it in the advertisement/brochure, the allotees can withdraw from the project. The developer will be liable to refund the entire amount paid by the allotees along with interest8.
- If the allottees are in possession of the flat and the developer fails to provide them with promised amenities as set out in the agreement for sale, the developers will be required to provide the allottees with all the amenities as promised and may be required to submit a certificate from its architect confirming that all the amenities as promised are provided9.
MISCELLANEOUS
- Mere non execution of agreements for sale, allottees are not precluded from invoking Section 18 of RERA Act. Section 18 of RERA Act will apply even in case of oral or formal agreements executed by the promoter10.
- Since payment of interest is not a penalty and promoter has been earning interest on the amount received from allottees and has been utilising such amounts received, promoter has to refund monies along with interest from the from the date of receipts of such amounts and not from the date of default.11
PENALTIES12
In our review of various news articles and orders passed by MahahRERA, MahaRERA has from time to time imposed large number of penalties on the developers. We have illustrated the maximum penalty imposed by MahaRERA for improper advertisement, delayed possession, unfair trade practice and non-compliance of RERA order as follows:
Penalties
- MRERA levied a penalty of INR 25,000/- on a developer for advertising a project without the RERA registration number. The developer contended that partial Occupation Certificate ("OC") was received for the project and only two apartments did not have an OC. However, MahaRERA maintained it was a violation of the law and imposed the penalty. Therefore, unless full OC is received for the project, registration number has to be mentioned on all the advertising material.
- MahaRERA imposed a penalty of INR 50,000/- on a real estate promoter for violating section 11(2) of the RERA Act. The promoter had published an advertisement in a local newspaper without mentioning the MahaRERA project registration number13.
CONCLUSION
On the basis of the analysis of the various orders, it is absolutely clear that, while RERA Act has filled in many gaps which were left blank by earlier legislations, but the core issue that still remains seems to be delay in handing over possession. Jurisprudence around this is still dynamic given the fact that different matters bring different facets which needs to be considered. Entire mechanism relating to delay in handover of possession should be very distinctly spelt out in the agreement for sale so that there is no ambiguity which will either impact the right of the developer or an allottee. In light of various judgments, MahaRERA should come up with a clarification whereby issue of delay as per agreement for sale and delay as per RERA registration are distinguished and clearly covered under a circular which may decrease the number of litigations.
Footnotes
1. Karan Chopra vs Skystar Buildcon Pvt. Ltd. - Order dated 25th July 2023 passed in Appeal no. AT006000000053550
2. Larsen and Toubro Limited vs Sudhir Gurtoo - Order dated 6th July 2023 passed in Appeal no. AT006000000031693
3. Mrs. Neha Uday Kalghutkar vs Wheelabrator Alloy Castings Limited - Order dated 5th July 2023 passed in Appeal no. AT006000000010445
4. Kavita Agrawal vs Park Express Joint Venture - Order dated 27th July 2023 passed in Appeal no.AT005000000052901
5. Naresh Joshi and Sarang Joshi Vs. Nahar Homes LLP - Order dated 16th December 2022 passed in Appeal no. AT006000000053252
6. Savita Adhip Parab vs M/s Varsha Construction Ltd. - Order dated 8th March 2023 passed in Appeal no. AT006000000053280
7. Dilip J. Mehta vs Akshar Developers - Order dated 19th October 2022 in Appeal No.AT006000000041924
8. Jignesh R Khemani and Gulab R Khemani versus Shree Siddhivinayak Infrastructure & Realty Maharashtra - Order dated 22nd April 2022 in Complaint no. CC006000000196570
9. Harish Rao and Ors. vs. Pentagon Shreemangal Vishram Venture and Ors - Order dated 18th January 2019 in Complaint no. CC005000000011961
10. Surana Constructions vs Deepak Bhandari - Order dated 6th July 2023 passed in Appeal no. AT006000000042043
11. Kunal Kumbhat vs Krishna Developers Private Limited - Order dated 27th June 2023 passed in Appeal no. AT006000000133980
12. i. https://realtynxt.com/news/eight-mumbai-builders-penalized-by-maharera-for-voilating-rules
ii. https://www.moneycontrol.com/news/business/real-estate/maharera-imposes-rs-50-lakh-fine-on-piramal-realty-2544155.html
iii. https://www.moneylife.in/article/maharera-imposes-rs-10-lakh-penalty-on-cci-projects-and-cci-for-delayed-possession/62346.html
iv. https://www.moneylife.in/article/maharera-imposes-penalty-on-developer-for-selling-single-flats-to-many-buyers-directs-refund-with-interest/54047.html
v. https://www.reunionhq.in/blog/maharashtra-real-estate-regulatory-authority-imposes-penalty-on-chandramouli-properties-for-violating-rera-advertisement-rules/
vi. https://www.lexology.com/library/detail.aspx?g=a53101fc-862f-4431-8dd6-9891fa174e87
vii. https://housing.com/news/maharera-penalises-firm-misleading-consumers/
viii. https://www.freepressjournal.in/mumbai/maharera-diktat-rs-5k-daily-penalty-imposed-on-developer-for-non-compliance ix. https://www.vidhikarya.com/FreeLegalAdvice/28954/non-compliance-by-builder-of-award-by-rera
13. https://www.reunionhq.in/blog/maharashtra-real-estate-regulatory-authority-imposes-penalty-on-chandramouli-properties-for-violating-rera-advertisementrules/
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