No agreement for sale, no refund, rules MahaRERA


Dismissing a complaint by some home buyers who had booked flats in a project by Bhagtanis in Powai, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has ruled that in the absence of a registered agreement for sale, the provisions of Section 18 of Real Estate (Regulation and Development) Act (RERA) do not apply.


The above-said group of home buyers had booked flats in Bhagtani’s Serenity project in upscale Powai and was given only allotment letters that contained a clause saying their investments will be refunded with a 15% interest if project approvals are not granted. Allotment letters stating similar terms were issued to buyers in Riyo (Mira Road), Sapphire (Dahisar) and Savannah (Kanjurmarg) housing projects too.


In its order dated December 29, Adjudicating officer and Member, MahaRERA, Bhalchandra Kapadnis said, “Section 18 clearly stipulates that a promoter is liable to pay interest or compensation if he fails to complete or is unable to give possession of an apartment in accordance with the terms of agreement for sale.”


“The Section 18 clearly indicates that there must be an agreement for sale for invoking Section 18. The allottee gets a refund only when the promoter fails to complete the apartment in accordance with the terms of agreement for sale or he is unable to give possession on the date specified in the agreement. Therefore, in the absence of any agreement for sale, section 18 has no role to play. It is necessary to bear in mind that issuance of allotment letter is the first stage and execution of the agreement for sale is the subsequent stage,” said Kapadnis in his ruling.


“We are disappointed with the ruling. We had huge hopes that now that a regulatory body exists, they will take cognizance of our complaint. The promoter hasn’t signed the agreement with 90 per cent of the buyers in Serenity though many of us have paid nearly 30 per cent of the flat’s cost,” said Col Tej Kohli (retd), one of the 15 complainants who invested Rs 20 lakh in Bhagtani Sapphire project in Dahisar in 2012, but later transferred it for a 1BHK flat in Serenity.


“The promoters have registered only 1 building with MahaRERA to escape their scrutiny and lied to the authority that not a single of the 77 flats have been booked, whereas so many allotment letters were issued and money was collected,” a distressed Col Kohli added.


Manjit Singh, another complainant, told Mumbai Mirror, “The promoter demanded payments up to the first podium, and I paid Rs 40 lakh out of the Rs 70 lakh. Section 13 of RERA says that a promoter has to make an agreement if he accepts more than 10 per cent, but no agreement was made. So, why can’t MahaRERA take cognizance of our complaint then?” 

Written by The Realty Paper

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