We are a group of homebuyers who booked flats in a multistoreyed project in Goregaon. Our agreements for sale were registered in 2015 with promised possession by December 31, 2018. We have already paid 80- 85% of the flat cost. The builder got MahaRERA extensions till December 31, 2025 without buyers’ consent. Construction has stopped for the last one year with only 70% work completed. The builder has also failed to pay interest for delay under Section 18 of RERA. What remedies do we have to secure our flats and recover interest? Can MahaRERA help terminate the builder? — Walter Fernandes & others, Goregaon
Since you have registered agreements for sale with possession promised in 2018, paid 80-85% of the flat cost and the project remains incomplete despite repeated MahaRERA extensions, it is a fit case for all homebuyers to jointly approach MahaRERA under Section 7 of RERA seeking revocation of the project registration and completion of the project either through the homebuyers’ association or with MahaRERA’s assistance.
Section 7 empowers MahaRERA to revoke registration if the promoter defaults under RERA, violates approval conditions or indulges in unfair practices. Here, the builder has failed to hand over possession despite repeated extensions and has also not paid monthly interest for delay under Section 18.
Importantly, Section 7(3) allows MahaRERA, instead of revoking registration, to continue it with conditions in the interest of homebuyers. During the hearing, buyers can insist that the builder pay delayed possession interest under Section 18 or adjust such interest against the balance consideration payable by buyers. If the builder agrees and undertakes timebound completion, the buyers’ interests are protected.
However, if the builder refuses such conditions, buyers can press for revocation of registration, effectively resulting in termination of the builder through MahaRERA itself.
Under Section 7(4)(a), MahaRERA can debar the builder from accessing its website, declare him a defaulter and display his photograph on its portal. Under Section 7(4)(b), MahaRERA is mandated to facilitate completion of the remaining development work and can freeze and later defreeze the project bank account for that purpose.
Once registration is revoked, Section 8 empowers MahaRERA to complete the project either through the association of allottees or by appointing a competent authority or agency.
Despite this strong legal framework, homebuyers rarely invoke Sections 7, 8 and 18 against defaulting builders. A similarly placed group of homebuyers in a Talegaon project had approached Mumbai Grahak Panchayat in 2019. We advised them to seek revocation under Sections 7 and 8, resulting in successful completion of the project benefiting over 160 homebuyers.
(Advocate Shirish V Deshpande is chairman, Mumbai Grahak Panchayat. Queries can be sent to him on email: shirish50@yahoo.com)
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