Author – Pravin Bhange, Co-author Divyanshi Rathour
Owning a home is a dream nurtured by millions. But what happens when this dream turns into a nightmare of endless delays? This is the story of two homebuyers who stood their ground, challenging a prominent developer in a battle for justice. Their struggle culminated in a landmark decision by the Maharashtra Real Estate Regulatory Authority (MahaRERA), shining a light on the rights of homebuyers and the responsibilities of developers.
Let’s explore this fascinating case, the implications it has for the real estate sector, and broader lessons homebuyers and developers can learn from it.
The Case at a Glance
The Complainants and Their Plight
The case arises out of two complaints filed by disappointed home buyers against Spenta Enclave Pvt. Ltd. relating to the Altavista – Phase 1 housing project in Mumbai.
- Complaint 1: Anil Kishinchand Rajani and Kajal Anil Rajani claimed interest for delayed handing over possession since January 1, 2019 and relief from the charging of maintenance charges prior to delivery.
- Complaint 2: Ganesh Praful Tondwalkar claimed interest for delay, compensation for mental harassment, and enforcement of terms of agreement.
The delivery dates promised on December 31, 2018, and December 31, 2019, expired without handing over possession. The buyers were left frustrated as they had paid almost the entire amount for their flats but were left without homes or any recourse.
Developer’s Defense
Spenta Enclave Pvt. Ltd. contended that
Possession had been offered in October 2020, accompanied by occupancy certificates.
External delays beyond their control caused delay.
Maintenance charges were claimed under the agreement.
Despite this, the buyers insisted that under Section 18 of RERA, 2016, which gives redressal to the buyers regarding delays in possession,
Legal Principles: RERA and its Implications
What is RERA?
The Real Estate (Regulation and Development) Act, 2016, was brought into effect to safeguard homebuyers and bring transparency to the real estate sector. The most important provisions are as follows:
Mandatory Registration: Developers must register projects under RERA.
Section 18: Entitles buyers to compensation or interest for delays.
Accountability: Developers must adhere to promised timelines and contractual obligations.
In this case, RERA served as the legal backbone for the buyers’ complaints, providing a clear path for redress.
Section 18: A Ray of Hope for Home Buyers
In Section 18 of RERA:
Buyers can opt out from a delayed project and claim an interest refund.
If a buyer decides to continue investment, he can claim accrued interest on account of delays till possession.
Even recourse to mental agony or money loss can be claimed.
This section prevents a developer from going back on his commitment without facing repercussions.
MahaRERA Proceedings
The Virtual Hearing
The case was conducted virtually. The complainants presented all their grievances in detail. Even though the developer was summoned, he did not attend the hearing and the case is decided ex parte.
MahaRERA’s Findings
- Delayed Possession: The developer had failed to deliver flats by the dates promised.
- Unjust Charges: Maintenance fees before taking possession were against the terms of the agreement.
- Interest and Compensation: Buyers were entitled to remedies under Section 18 of RERA.
- Exclusion of Excuses: Delays caused due to external complexities are not relevant as the developer alone is responsible.
The Verdict
MahaRERA ordered in favor of the buyers by passing an exhaustive order:
Interest for Delayed Possession:
Interest was payable on the sum deposited by the buyers with MahaRERA calculated from January 1, 2019, to the date of issuance of occupancy certificates.
Interest rates are applicable as provided under Rule 18 of Maharashtra RERA Rules, 2017
Compensation for Mental Aggravation:
One applicant was allowed to move an adjudicating officer to decide upon the compensation amount.
Adherence to Terms of Agreement:
The developer was made to collect maintenance only after handover, as per the agreement for sale (AFS).
No Moratorium Benefit:
Developers were not eligible for immunity under COVID-19 related moratoriums as delay had occurred before the COVID-19 pandemic.
Disallowance of Frivolous Claims:
Reliefs unrelated to Section 18 have been disallowed as buyer cannot prove such claims.
Impact on the Real Estate Sector
A Milestone in Consumer Protection
This verdict reinforces RERA’s role as a game-changer in Indian real estate. It sets a precedent for holding developers accountable, emphasizing that timelines and contractual obligations are non-negotiable.
Encouraging Transparency
The case underscores the importance of transparency in buyer-developer relationships. Buyers now have a robust legal framework to challenge delays and demand justice.
A Wake-Up Call for Developers
Developers must understand that excuses for delays, whether logistical or external, carry little weight under RERA. This case emphasizes the need for realistic commitments and proactive communication.
Lessons for Stakeholders
For Homebuyers
- Know Your Rights: Familiarize yourself with RERA provisions and your rights under the Agreement for Sale.
- Document Everything: Keep records of payments, correspondence, and agreements to support your case in case of disputes.
- Persistence Pays Off: Litigation can be long and arduous, but persistence does pay off.
For Developers
- Realistic Timelines: Do not overpromise and under deliver on timelines for the project.
- Accountability is Key: Delayed delivery can dent reputation and invite legal consequences.
- Transparency Builds Trust: Communication with buyers leads to long-term goodwill.
For the Real Estate Industry
- Strengthening Compliance: Adherence to RERA norms will ensure smooth operations and fewer disputes.
- Restoring Faith: Cases like this rebuild buyer confidence, a critical factor for industry growth.
- Looking Ahead: The Evolving Landscape of Real Estate
The MahaRERA verdict is more than a decision—it’s a testament to the evolving dynamics of Indian real estate. It reflects a shift towards accountability, fairness, and a consumer-first approach.
The sector is set for a transformation as buyers become more aware of their rights and developers adapt to stricter regulations. Trust and transparency will be the cornerstones of this new era, and it will benefit all stakeholders.
Conclude: The Dream Delay Turns into Delivered Promise
The MahaRERA case stands as a beacon of hope for those aggrieved by defaulting purchases and proves justice can prevail even in a precarious judicial system that allows buyers to persevere.
It brings home to the developer that commitments to timelines and agreements are not mere legalities but also ethics. It will not only avert disputes but will open avenues for a flourishing trustful real estate landscape.
So, let us continue with the conversations now that we celebrate this victory for accountability. Please share your comments, experiences, or inquiries below. Together, we will create a future in which every homebuyer’s dream will be fulfilled in time.
