HomeWhat's TrendingPre-RERA Agreements Get RERA Protection: Maharashtra Tribunal Rules in Favor of Homebuyers

Pre-RERA Agreements Get RERA Protection: Maharashtra Tribunal Rules in Favor of Homebuyers

Homebuyers in Maharashtra can benefit even with pre-RERA agreements. In a landmark decision that could have far-reaching implications for the real estate sector, the Maharashtra Real Estate Appellate Tribunal (REAT) has ruled on the applicability of the Real Estate (Regulation and Development) Act, 2016 (RERA). This ruling, made by a bench comprising Justice Shriram R. Jagtap and Dr. K. Shivaji, sheds light on the interpretation of RERA’s provisions in relation to agreements for sale executed prior to the enactment of the act or under previous legislation.

The case in question revolves around a residential project known as ‘DB OZONE’ located on Mira Road, Thane District. In 2009, the developer also referred to as the appellant, entered into agreements for sale with prospective buyers, or respondents, with the promise of possession by December 2014, along with a grace period of 12 months. However, as the project progressed through its construction phase, delays ensued, leading to discontent among the buyers.

Amidst the construction delays, the RERA Act of 2016 came into effect, prompting the developer to register the project under Section 4 of the Act. However, despite registration, the promised possession date was not met, resulting in the buyers filing complaints before the Maharashtra Real Estate Regulatory Authority (MahaRERA). These complaints sought both possession of their units and compensation for the extended delay.

In response to the complaints, the developer argued that the provisions of the RERA Act should not be applicable in this scenario. Their argument was based on the premise that all transactions between the parties were executed under the provisions of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management, and Transfer) Act, 1963 (MOFA), which was still in force at the time.

However, MahaRERA, through its order dated 02.01.2020, held the developer liable for the delay in possession and ordered them to pay interest as compensation. Dissatisfied with this decision, the developer lodged an appeal before the REAT against the Authority’s order dated 01.01.2020.

The Tribunal, in its verdict, dismissed the developer’s application while affirming the applicability of the provisions of the RERA Act of 2016. The Tribunal emphasised that RERA’s provisions are prospective in nature and extend to all agreements, regardless of whether they were executed under a different legislative regime. Crucially, if a project has been registered under the Act, it falls within the purview of RERA, even if agreements were made prior to its enactment.

This decision by the REAT underscores the importance of compliance with RERA regulations, particularly post-registration of projects. It serves to reinforce consumer protection measures and ensure accountability within the real estate sector. This ruling provides clarity and sets a precedent for similar cases, offering stakeholders a clearer understanding of their rights and obligations under RERA.

Legal experts from Vakilsearch hail REAT’s decision. It strengthens homebuyer rights and ensures fair play in real estate transactions. The judgment strengthens homebuyer rights. RERA applies to registered projects, ensuring fair play in real estate. Vakilsearch connects you with real estate lawyers to safeguard your rights. Contact us today for legal consultation.

Akash G Varadaraj