The Maharashtra Real Estate Regulatory Authority (RERA) has been in the news for all the right reasons. In what is being looked at as a landmark judgment, the body has ordered JVPD Properties Private Limited to refund Rs 7.10 crore along with 15% interest to 21 aggrieved home-buyers. While many awards to affected home-buyers have been passed before, this order is unique as it potentially blocks a major loophole in the real estate regulations. This case pertains to 21 individuals who bought homes with Bhagtani (Director with JVPD Developer) in Mumbai’s suburb, Powai, from 2013-2015.
While the payment schedule for projects under development is clearly laid down, in this case, the 21 complainants had paid up almost 50% of the total amount from 2013 onwards on false assurances.In 2017, the developer sent out a letter to all their clients stating that they were unable to receive approvals for the projects and therefore they should either collect their money or have it transferred to another development.The group of aggrieved home-buyers made several trips to the developer’s offices, but it led to nothing concrete.One of the arguments put forth by the developers was that the home-buyers were all investors in the project and therefore RERA would have no jurisdiction in the matter.The non-signing of the agreement for sale also posed a challenge.The developer also kept saying that while the approvals had not come through, the intent of the developer was clear and they wanted to build the property, as assured to the home-buyers.
The RERA, in this case, also penalised the developer by levying a fine of Rs 30,000 against them towards costs. Furthermore, the court also put a charge on the developer’s properties until such time that he repaid all the 21 home-buyers, with interest.
One of the reasons that this order is significant is because of its view on allotment letters. Until now, even the Apex Court looked at allotment letters as a sub-standard document, but it changes substantially in favour of home-buyers with this order. The real estate sector is one of the most complicated sectors in the world. To expect a home-buyer to be on top of things is not possible. What the RERA has done is to make the process simple; every developer has to register his project online mandatorily and with that, display the details of all approvals, title certificates, layout plans, and mortgages details, for a potential buyer to verify.