The MahaRERA has recently issued a ruling that could significantly impact homebuyers’ rights under the Real Estate Regulation and Development Act, 2016 RERA. The bench, consisting of Justice Shriram R. Jagtap and Dr. K. Shivaji, emphasised that a written expressed agreement for sale is not an indispensable requirement for allottees to avail themselves of the rights enshrined in Section 18 of the RERA. Instead, the Tribunal underscored the significance of the parties’ intentions, rather than the mere formalities of documentation.
Section 18 of the RERA delineates the ‘rights and remedies available to homebuyers when a promoter fails to meet obligations.’ It explicitly stipulates that if a promoter fails to fulfill their obligations or provide possession of a property according to the terms specified in the agreement for sale, the allottee is entitled to receive interest from the promoter for each month of delay until possession is handed over, as per the regulations prescribed.
The genesis of this ruling lies in a case where an appellant had booked a flat in a project by a promoter and received an allotment letter on 25 November 2015. The allotment letter outlined the possession date as 31 March 2017. However, owing to delays in possession, the appellants approached the promoter seeking cancellation of the allotment letter and a refund of the entire paid amount, alongside interest.
When the promoter refused to refund the full amount, the appellant lodged a complaint with the Maharashtra Real Estate Regulatory Authority (MahaRERA). However, MahaRERA’s order dated 21 March 2020, stated that since there was no executed agreement for sale between the parties, the case fell outside the ambit of RERA. Consequently, the cancellation would be governed by the terms outlined in the allotment letter.
Displeased with MahaRERA’s decision, the appellant filed an appeal before the Tribunal, contesting the Authority’s ruling.
In its verdict, the Tribunal not only allowed the appeal but also set aside MahaRERA’s order, deeming it unsustainable. It elucidated that a written expressed agreement for sale between the allottee and the promoter is not a prerequisite for the allottee to avail themselves of the rights stipulated under Section 18 of the RERA Act.
The Tribunal drew reference from its earlier decision in the case of Jyoti K, Narang, and Anr. V/s. CCI Projects Pvt. Ltd. (appeal No. AT 10841), wherein it was established that Section 18 is applicable even in the absence of an agreement for sale. Additionally, it cited the Bombay High Court’s decision in the case of The Bombay Dyeing & Manufacturing Company Limited v/s. Ashok Narang & Ors. affirmed that Section 2(c) defines an agreement for sale between the promoter and the allottee, without specifying that it must be in writing.
In conclusion, the Maharashtra Real Estate Appellate Tribunal nullified MahaRERA‘s order and affirmed that an expressed agreement for sale is not a prerequisite for allottees to avail themselves of the rights stipulated under Section 18 of the RERA. This ruling is poised to have far-reaching implications, ensuring enhanced protection for homebuyers under RERA, regardless of the presence of a formal written agreement.
Vakilsearch lawyers applaud REAT’s decision. It strengthens homebuyer protection and clarifies the legal weight of allotment letters under RERA. Vakilsearch connects you with top real estate lawyers to ensure your rights are protected.
