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MAHA RERA BUILDERS MUST PAY HOME BUYERS FOR CHANGING PROJECT PLAN

The Maharashtra Real Estate Regulatory Authority (MahaRERA) is setting an example of apropos judgment since its inception. In one of the first such orders, the state RERA authority of Maharashtra has ordered a Pune-based builder to pay a restitution of Rs 50,000 along with interest to each of the 15 home buyers who had lodged a complaint against the developer for not only delayed possession but also altering project plan details without any prior consent.

Reportedly, a group of 15 home buyers had booked flats in a 21-storey twin tower project on Sinhagad Road in Pune in the year 2013-14. As per the registered complaint, the developers had assured that the possession would be given by December 2016. Along with the possession delay the developer has been accused of changing project plan without informing the buyers. The home buyers demanded an interest on their payments including compensation under Section 14 and 18 of RERA. 

Contradicting the complaint, the developer claimed that the sale agreement of the project had been signed before the central real estate Act (May 1, 2017), thereby RERA provisions can’t be applied retrospectively. Also, they attributed to the hold-up in having clearances from the Ministry of Environment and Forests as the reason behind the slowdown in possession deliverance. Meanwhile, they completely denied the allegation of project plan changing.

Adjudicating officer and member, MahaRERA, Mr Bhalchandra Kapadnis mentioned that the regulator had the jurisdiction to entertain the complaint, and the home buyers were entitled to both interests for delayed possession and compensation for the change in project plan without their consent. 

Spelling out this judgment Kapadnis, a retired district judge, exemplified the recent verdict of the Honorable Bombay High Court on petitions challenging the validity of RERA. In its recent verdict, Bombay High Court referred to Section 18 of the central Act and accepted that it is retrospective as the law is approaching. The projects registered with MahaRERA will be counted as on-going projects.

“The cause of action to claim possession is a recurring cause of action which continues and therefore, I hold that MahaRERA has jurisdiction to entertain these complaints and adjudicate upon it, though the agreements for sale have been executed before May 1, 2017,” Kapadnis ruled.

He referred to Para 119 of the HC’s judgment on RERA validity which states that the promoter is answerable regarding timely project deliverance, as he assesses a tentative timeline for project completion and signs on the sale agreement on that basis. Naturally, buyers will assume that that project must have obtained all the required approvals and certificates much before the date of deliverance. 

Also referring to Section 7 of Maharashtra Ownership of Flats Act (MOFA), he said that the promoter has no right to change a project plan abruptly without the previous consent of the buyers. It’s been observed in this case that the developer, instead of the underwater tank, has provided over-head tanks. He also changed the parking area and some of the amenities too. 

The developer has been asked to pay an interest of 10.5% on the amount paid by the 15 home buyers from January 1, 2017 on monthly basis of the delay till the time of actual project deliverance. Kapadnis also ordered the developer to pay Rs 50,000 each as compensation for change of plans without their permission, and deliver possession by Feb 28, 2018, instead of June 30, 2018.

“Maharashtra is one of the first states to notify RERA rules and establish the state regulatory authority. Ever since the authority has been set up, both the buyers and the developers have received valid judgments against their predicaments. With its every verdict, MahaRERA has set the benchmark for issues relating to real estate for the other states and UTs. It is expected that complete execution of RERA will bring much-needed growth and standardization in Indian real estate transaction,”-said Mr Mahesh Somani, Chairman- National RERA Committee, National Association of Realtors India (NAR-INDIA) realtors India (NAR-INDIA).

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