Experts laud circular issued by authority on January 10, instructing developers to avoid such practices, say it will bring in transparency
Experts said MahaRERA should scrupulously check every declaration filed with the authority. File Pic/Nimesh Dave
With the intention of curbing developers from registering multiple projects on the same land, leading to multiple litigations filed by affected flat buyers, MahaRERA had issued a circular on January 10 directing developers to refrain from such practices. Experts practising in MahaRERA have welcomed the decision, stating that this would bring in much-needed transparency. Flat buyers and housing societies under redevelopment have to no longer worry about multiple Project Registrations under MahaRERA on the same plot of land.
Multiple registrations
“It is high time this order was made effective. We represent litigants on two such projects, one in Malad and one in Mahim, where multiple registrations have been done on the same plot of land, with the same CTS numbers by two different sets of developers and both procured a MahaRERA registration number. Now owing to this number, both parties are claiming rights as authentic developers to the plot and wrestling with each other to develop the plot and oust the other one. Obviously, both developers have huge commercial interests due to new sale-purchases,” pointed out Advocate Anil D’souza, secretary, Bar Association of MahaRERA.
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Societies affected
“But the real sufferers are the society members that seek redevelopment, who have given up their plot, their homes are demolished, and are now living in rental accommodations, paying rent out of their pockets. The other set is the new flat purchasers who have invested their money with huge home loans, and this project is locked in litigation,” pointed out Advocate D’souza.
Scope for confusion
“The declaration filed by developers is many times undated. This leaves scope for confusion, and in some cases, the columns are left blank in such declarations. As such, MahaRERA should scrupulously check every declaration filed with the authority. In case of multiple registrations, the flat buyers are at the receiving end. In such cases, MahaRERA must impose penalties under Section 60 and 61 of RERA, which extends to 5 per cent of the project cost, and MahaRERA in such cases should also file FIR against developers to curb this practice,” said Advocate Godfrey Pimenta, who practises in MahaRERA.
“Flat buyers had high hopes after the enactment of RERA. But, since cases are dragging for more than a year and, in some cases even three years, even after getting favourable orders, the flat buyers are put through a lot of hassle. Therefore, MahaRERA has to take some immediate proactive measures to protect the interest of the flat purchasers,” said Pimenta.
Expert view
Advocate Shreeprasad Parab, Expert Director, Maharashtra State Housing Federation (MSHF), said, “As per the Indian Contract Act, a proposal is when one person signifies to another his willingness to do something with a view to obtain (obtaining-delete) the assent of another person to whom the proposal is made. When that another person signifies his assent, then the proposal is said to be accepted. The whole process is thereafter referred to as a Promise (VACHAN). Similarly, in the Real Estate Sector, the Developer is bound to showcase all the positive amenities in the project, and sometimes his marketing team makes such assurances and promises. Thus impressed upon, the allottees book the flats in the Project.”
“MOFA and RERA are regulatory statutes enacted to regulate the Real Estate Business in a fair and transparent manner. Thus, RERA compels the Promoter to fulfill its obligations, responsibilities, and functions as per the Agreement for sale till the conveyance of the property is executed. RERA directs the Promoter to develop the Project as per the advertisement or prospectus. RERA Act states that the Developer shall adhere to sanctioned plans and project specifications as promised. If the Developer wants to make any additions and alterations in the sanctioned plans, layout plans, specifications, and the nature of fixtures, fittings, and amenities described in the prospectus, agreement, etc., then a minimum of 2/3rd consent of the allottees who have booked the flats is mandatory. Similar provisions were earlier available in the MOFA Act,” Advocate Parab said.
“Sometimes due to litigation, the Developers tend to make multiple Registrations on a single project or in a layout project, thus making the addition and deletion of the actual facts. It is a common practice that as the law is enacted, the people start finding the lacunas to escape with the provisions of the law. Therefore, to make the doors of the loopholes locked, RERA has come with this new circular where at the entry point, that is, at the entry of the Registration of the Real Estate Project, the amenities, services, and promises are locked thus providing more protection to the common allottees and thereby making the Developer beware - that is “Caveat Venditor.” However, it is also observed that in some cases, developers are not making true disclosures of the Project details and Project litigations. Thus, RERA shall also make similar provisions at the entry point to verify the actual Project facts and litigations by certifying documents and undertakings,” Advocate Parab concluded.
What's next?
“Now going forward, MahaRERA should integrate the system in such a way that the data on registered projects can be shared and accessed by other land record departments under the revenue department and with the other planning authorities to set their records straight,” said Prabhu. “Our suggestion is that MahaRERA should regularly have an open house at least once in 2-3 months, where advocates and flat purchasers can point out such loopholes and lacunae in the system which builders/developers are taking advantage of,” said Advocate D’souza.
The heart of the matter
CA Ramesh Prabhu, founder chairman of Maharashtra Societies Welfare Association (MahaSEWA), said, “MahaRERA has come to know that many unscrupulous developers have started registering multiple projects on the same piece of land. This is commonly seen in redevelopment/development projects. Due to the trust deficit between the landowner and the developer, both of them register two different projects for their respective shares of the built-up area. Because of this, multiple disputes have come up over time before MahaRERA, where litigants have raised concerns about whom to hold accountable if the project is stalled midway.”
Scenario 2
He added, “There have been instances where development agreements have been executed, but due to disputes between the landowners and the developer, the landowner blatantly terminates the development agreement. Then he [the landowner] proceeds to register a new project on the same piece of land, despite the developer’s project being initially registered. Also, in cases of partnerships, before the partnership is dissolved, there have been cases where one of the partners, either the landowner or the developer with the BMC proposed construction plans registered in his name, registers a new project with MahaRERA on the same plot, thereby leading to confusion and disputes,” pointed out Prabhu.
Scenario 3
He also said, “In the case of cooperative housing society redevelopment, if there is a dispute with the developer, and the housing society terminates the developer, the society proceeds to register a self-redevelopment project before MahaRERA. Such a situation leads to multiple litigations, which not only puts hurdles to the project but also causes hardship to the existing members and flat buyers.” “To plug these loopholes, MahaRERA has now issued the circular where before the registration of any project, the promoter has to give a declaration that there is no prior project registered on the same piece of land. Failing which, MahaRERA can take appropriate action,” Prabhu said.
60-61
RERA sections under which penalties must be imposed
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