MahaRERA orders builder to pay home buyers for changing project plan


In a landmark order, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has asked a Pune-based developer to pay a compensation of Rs 50,000 along with interest to each of the 15 home buyers who complained that the developer not only delayed possession but had also changed the original project plan without taking them into confidence.

A group of 15 home buyers who had booked flats in Aura and Myra wings of Artemis, a 21-storey twin tower project on Sinhagad Road in Pune, had complained that the developers Calyx Estate Lenora, Landmark LLP and Kankariya Properties had promised possession by December 2016 when they booked flats in 2013-14. Since the possession has been delayed and even their consent was not taken when the project plan was changed, they sought interest on their payments and compensation under Section 14 and 18 of RERA.

The developers questioned MahaRERA’s jurisdiction to entertain the complaint stating that as the agreements for sale were executed before RERA was enacted on May 1, 2017 hence RERA provisions cannot be applied retrospectively. They contended that the possession was delayed because the clearances from the Maharashtra Pollution Control Board, the National Defence Academy, and the Ministry of Environment and Forests were not granted in time. They also denied that they have changed the project plan without the knowledge and consent of home buyers.

Adjudicating officer and member of MahaRERA Bhalchandra Kapadnis ruled that the regulator had every right to entertain the complaint, and the home buyers were entitled to both interest for delayed possession and compensation for change in project plan without their consent.

Explaining the reasons for his ruling, Kapadnis, a retired district judge, referred to Bombay High Court’s recent judgment on petitions challenging the validity of RERA. “Honourable Bombay High Court referred to Section 18 and accepted that it is retrospective though the law is prospective. The project of the respondents is registered with MahaRERA as it is an on-going project,” he said in the order. “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 put the onus on the promoter in assessing the time required for completion of a project. “The promoter is expected to have fair assessment of the time required for completing the project, so the respondents were expected to estimate the time likely to be taken for obtaining sanctions and approvals before the launch of their project,” he said.

He also referred to Section 7 of Maharashtra Ownership of Flats Act (MOFA), which states that the promoter shall not make any alteration in the structure prescribed in the approved plan without the previous consent of the buyers. He said the developer had gone ahead with overhead tank instead of underwater tank, changed the parking area and some amenities too.

He then directed the developers to pay interest at the rate of 10.5 per cent on the amount paid by the 15 home buyers from January 1, 2017 for every month of delay till actual possession. He asked the developer to pay Rs 50,000 each as compenssation for change of plans without their consent, and handover possession by Feb 28, 2018 instead of June 30, 2018.

Written by The Realty Paper

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