Justice for Homebuyers: MahaRERA Cracks Down on Delayed Projects!

In a landmark ruling, the Maharashtra Real Estate Regulatory Authority (MahaRERA) addressed a dispute involving a delayed real estate project in Devad, Panvel, initiated in 2013. The Complainant alleged significant violations by the developers, including project delays, failure to register the project under MahaRERA, and the absence of an Occupancy Certificate (OC). Despite substantial payments and contractual obligations fulfilled by the buyers, the project remained incomplete, preventing possession and occupancy. The Developers’ failure to comply with the regulatory framework and deliver on their commitments led to legal repercussions, highlighting the importance of registration, timely completion, and proper documentation under the Real Estate (Regulation and Development) Act, 2016.

Key Issues

A. Non-Registration: The project was not registered with the Maharashtra Real Estate Regulatory Authority (MahaRERA), which violates Section 3 of the Real Estate (Regulation and Development) Act, 2016. This non-registration prevents legal oversight and regulatory compliance, resulting in the absence of transparency and accountability for the project.

B. Delayed Possession: Agreements signed as early as 2014 have not been fulfilled, with significant delays in delivering possession to buyers. The delay is exacerbated by the non-issuance of the Occupation Certificate (OC), which legally validates the readiness of the property for habitation and occupancy.

C. Third-Party Rights: Allegations exist that the respondents have advertised and entered into agreements with third parties for the sale or transfer of property rights despite the project being incomplete. These actions could imply an attempt to circumvent regulations, creating potential legal conflicts regarding property ownership, delivery, and completion.

Arguments Advanced by Advocate Aditya Pratap

Advocate Aditya Pratap, representing the Complainant, presented specific and detailed arguments highlighting the Respondents’ violations and their impact:

A. Violation of Legal Provisions:

1. Advocate Aditya Pratap argued that the Respondents violated Section 3 of the Real Estate (Regulation and Development) Act, 2016, by failing to register the project with MahaRERA.

2. The requirement for registration was emphasized as mandatory for all ongoing projects without an Occupancy Certificate, as specified under the Act.

3. Non-registration, as pointed out, deprived the Complainant of the legal protections and remedies guaranteed by MahaRERA.

B. Delay and Breach of Agreement:

1. The Respondents were accused of breaching the agreement for sale executed in 2014, which obligated the completion of the project and delivery of possession within a reasonable timeframe.

2. Despite receiving payments exceeding ₹7.5 lakh from the Complainant, the project remained incomplete.

3. This failure to deliver possession constituted a clear breach of both contractual obligations and statutory duties under the Real Estate Act.

C. Creation of Third-Party Rights:

1. The Respondents unlawfully advertised, marketed, and entered into agreements with third parties, creating third-party rights within the incomplete project.

2. Such actions compromised the Complainant’s position and delayed the resolution of grievances.

3. These transactions, without registration of the project, were cited as a direct violation of Section 3 of the Act.

D. Reliefs Sought:

1. Advocate Aditya Pratap sought the following remedies from MahaRERA:

Mandate Registration: A directive for the Respondents to register the project with MahaRERA within 30 days, ensuring full compliance with the statutory requirements set out in the Real Estate (Regulation and Development) Act, 2016, including submitting project details and documents for transparency and accountability.

Prohibit Third-Party Rights: A clear prohibition on advertising, booking, or entering into agreements that would confer third-party rights related to the sale or transfer of property, until the project is fully registered with MahaRERA and compliant with all regulatory frameworks.

Impose Penalties: The imposition of monetary fines on the Respondents for violating Section 3 of the Act, along with daily penalties under Section 63 for the continued delays in registration and failure to meet statutory deadlines, further deterring non-compliance.

Possession or Compensation: An order compelling the Respondents to either deliver possession of the flats within a fixed and reasonable timeframe or to provide compensation for the delay. This compensation would include interest on the amounts paid by the Complainant, along with damages for the hardship caused by the delay, such as inconvenience and financial losses.

Arguments Advanced by the Opposite Party

Although absent during the proceedings, the Respondents could have raised the following defences:

A. Compliance Efforts: Claimed they were in the process of securing necessary approvals, including the OC.

B. Unforeseen Delays: Attributed delays to regulatory or market challenges beyond their control.

C. Exemption from Registration: Argued that the project commenced before MahaRERA’s enforcement, exempting it from registration requirements.

D. Resolution Attempts: Asserted they were taking steps to amicably address the Complainant’s concerns.

Observations and Ruling:

A. Ex-parte Proceedings: The Maharashtra Real Estate Regulatory Authority (MahaRERA) proceeded with the case ex-parte due to the Respondents’ continuous failure to appear at hearings, despite being duly notified. The decision was made solely based on the Complainant’s detailed submissions and supporting evidence, which included contractual agreements, proof of payments, and project delays.

B. On-going Project Status: MahaRERA classified the project as an ongoing project under Section 3 of the Real Estate (Regulation and Development) Act, 2016, since it was incomplete and lacked an Occupancy Certificate (OC). The classification confirmed that the project fell within the regulatory purview of MahaRERA, obligating the developers to adhere to the provisions of the Act, including timely completion, registration, and issuance of necessary legal certifications for the project’s completion and possession.

C. Penalties and Directives:

Registration Mandate: The respondents were directed to register the project with MahaRERA within 30 days of the order.

Prohibition of Third-Party Rights: The respondents were prohibited from advertising, booking, or entering into agreements for sale or creating third-party rights until the project was registered with MahaRERA.

Daily Fines: MahaRERA imposed a daily fine under Section 63 of the Act for non-compliance with the registration directive.

Additional Penalty: The respondents were further fined for violating Section 3 of the Act, applicable if the Occupancy Certificate (OC) was obtained after May 1, 2017, without registration.

Status Report: The Panvel Municipal Corporation was directed to submit a report on the current status of the project within 30 days to facilitate further proceedings.