MahaRERA steps in to assist purchasers of apartments

June 22, 2024

Directs developer to formalize sales agreements with buyers holding only pre-RERA era allotment letters.

MahaRERA intervened to aid flat buyers who were pressured by a developer to pay additional fees to finalize sale agreements for flats booked as early as 2006. Experts believe this significant ruling will also assist other buyers facing extended delays and unjust payment demands from developers. The order was issued by MahaRERA in response to multiple complaints against a developer whose Goregaon West project has experienced extensive delays.

The quasi-judicial body had recently passed an order in favour of 10 complainants, who only had allotment letters, some of which merely mentioned the floor and no mention of flat numbers.

Interestingly, the MahaRERA project registration webpage shows that the initially proposed completion date of December 31, 2019, was later updated to December 30, 2022, and now reflects a new completion date of December 31, 2025.

The eight complainants received allotment letters from Sahajanand Developers on the company’s letterhead regarding bookings in the proposed building named Siddharth Nagar Gurukul Cooperative Housing Society Limited in Goregaon West. None of these letters specify flat numbers, although some mention the floor numbers where the flats were booked by the complainants.

The record submitted to the authority also indicates that the respondent has received partial payments from all eight complainants, totaling more than 20% of the total consideration in each case. Despite receiving these payments, the respondent has not executed or registered the sale agreements for any of these complaints to date,” the order stated.

Additionally, the project’s name was altered from Siddharth Nagar Gurukul CHS Ltd to Arista when it was registered with MahaRERA.

Additional discrepancies

MahaRERA observed that one of the complainants had booked two flats but received only one allotment letter covering both units. Consequently, the complainant filed a single grievance complaint regarding both flats. The authority also noted that another complainant submitted a brochure allegedly published by the respondent, indicating a possession date of 2013, along with an audio authentication report issued by Bombay Forensic under Sections 45A and 65B of the Indian Evidence Act. In contrast, the respondent presented a subsequent allotment letter dated November 11, 2020, specifically for flat B-1003 on the 10th floor of the project, stating the possession date as June 30, 2022.

The opposing viewpoint

The developer’s legal representative contended that complainants 1 to 8 are investors, hence no specific flat was allocated in the allotment letter. Furthermore, the allotment letter does not specify a completion date, nor is there an agreement for sale in place.

In defense of the delays, the developer stated, ‘The delays are due to requirements for environmental clearance, changes in planning authority, the promoter’s health issues, and the impact of COVID-19.

Observation by MahaRERA

In his order, MahaRERA chairman Ajoy Mehta stated, ‘It is evident that the respondent has violated the Act by accepting more than 10% of the total consideration amount from the complainants for the booked flats without entering into a written agreement for sale to date.

The Authority clarifies that even if the allotment letters issued by the respondent to the complainants are from the pre-RERA period, they still fall under the provisions of the RERA Act, which has retrospective applicability. The order further states, ‘The respondent has not provided any evidence that the complainants are investors rather than allottees.

Additionally, the MahaRERA project registration website, where information is disclosed and regularly updated by the respondent as required, does not list any of the complainants as investors or landowners. Therefore, the authority recognizes the complainants as legitimate allottees and homebuyers. It concludes that the respondent’s claim that the complainants are investors is vague and baseless, seemingly an attempt to evade legal responsibilities.

MahaRERA order

In its ruling, MahaRERA stated, ‘The complaints are upheld, granting relief to the claimants. The respondent is instructed to execute and register the sale agreement in the names of the complainants within 60 days from the date of this order. Failure to comply will result in penalties imposed by the authority.’ Additionally, in the comprehensive order, MahaRERA directed the respondent to compensate the complainants for delayed possession and provide other relief requested.

The purchaser of the flat states…

Aarif Khan

Aarif Khan, aged 54, one of the complainants, expressed, ‘I appreciate MahaRERA for issuing the order. I am prepared to proceed with the project and settle the remaining balance for my flats according to the agreed payment schedule from 2006.

Legal counsel’s statement

Advocate Godfrey Pimenta

Advocate Godfrey Pimenta, representing one of the complainants, commented, ‘The order issued by the MahaRERA chairperson is groundbreaking because in the pre-RERA era, developers often sold flats without necessary permissions such as intimation of disapproval or commencement certificate. Flats were sold at discounted rates with specific floor numbers based solely on the area to be purchased. In this case, no flat number or agreed date of possession is specified. Therefore, the chairperson’s decision is progressive.

When asked about the next steps, Pimenta stated, ‘If the developer fails to comply with the order, we will file a non-compliance complaint with MahaRERA.

Posted and reproduced in Public Interest by

Adv. Sulaiman Bhimani Legal Consultant

Expert in RERA & Consumer Matters, Co-operative Scty Matters,

Deem Conveyance, Family Matters, and Property Disputes.

Human and Civil Rights Campaigner

President Citizens Justice Forum https://citizensjusticeforum.in