No Differentiation between Homebuyer, Investor: MahaRERA

In a landmark ruling, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has refused to differentiate between an investor in a housing project and a homebuyer and has directed a developer to honour contractual obligations. The ruling is expected to set a precedent for all such matters arising from the refusal of developers to acknowledge the rights of investors as homebuyers that are pending before consumer forums, other state RERA authorities and courts. In a case, complainant approached the MahaRERA against a realty developer and asked the regulator to direct the builder to execute the registered agreement for sale with them and to hand over possession too. The complainant had booked five apartments in the developer’s project in Boisar near Mumbai, paying Rs 15 lakh for each flat. According to the regulator, the complainants had invested their money in the project and therefore their rights needed to be protected and the developer is expected to abide by the contract. According to the complainant family, they paid the entire consideration for these apartments and were issued five separate allotment letters on October 9, 2017. These allotment letters were duly signed by the developer and notarised. As per the allotment letters, the developer agreed to hand over possession within two years, with the stipulation that the apartments would be bought back if they were not delivered on time. However, the developer disputed the claims of the complainants and alleged that they were not allottees but investors. According to the developer, the complainants had approached the developer for investment purposes and they were given blank allotment letters as security. The developer said the complainants were earning returns from the funds they had invested, as revealed by the allotment letter, and termed them investors and not allottees or end-users. Section 13 of RERA provides that a promoter cannot accept more than 10% of the apartment price from allottees without first registering the sale agreements with the allottees, said Vijay Satbir Singh, a member of MahaRERA. “The promoter should not have accepted the money from the complainants without first registering the agreements for sale with the complainants,” the order stated. MahaRERA told the developer it cannot deny the claims of the complainants merely by saying they were investors and not allottees since the complainants had invested their money in the registered project. The regulator directed the developer to execute a registered agreement for sale in accordance with the allotment letters-cum-agreements dated October 9, 2017, failing which the money paid by the complainants needs to be refunded.