For Redevelopment, Housing Society Is Also Promoter: RERA

For redevelopment, housing society is also promoter: RERA

MUMBAI: In a relief for flatbuyers in a Goregaon redevelopment project, the Maharashtra Real Estate Regulatory Authority (Maha RERA) has held that a housing society is also a promoter.

The Maha RERA recently heard a complaint by purchasers of flats in the sale component of a project called Horizon. Udayachal Goregaon Cooperative Housing Society, with 15 members,had appointed Jaycee Homes Pvt Ltdin April 2013 to reconstruct their building with stilt and 15 floors and to sell additional flats.

The developer entered into agreements and collected money from purchasers. He constructed till the 11th floor. Due to non-compliance of development terms, the society terminated the developer and further refused to accept the rights of the purchasers to get their homes. Fifteen purchasers moved Maha RERA contending that their agreements with the developer are legal and binding on the society and the developer and they must be directed to hand over possession of their flat by completing the construction.

The society objected saying Maha RERA cannot hear their complaints as it is the owner of the land and not the promoter. Further, it claimed that there is no privity of contract between the society and the complainants. The purchasers’ advocate Lakshmi Murali argued that the complaints are maintainable because the society being the owner of the land is a promoter. She said the society had no right to terminate the development agreement without the consent of the purchasers and especially when they have also contributed towards the construction.

The society’s advocate cited the High Court’s order in Vaidehi’s case which held that under Maharashtra Ownership of Flats Act society is not a promoter and none of the purchasers can file a case for specific performance of their agreement. The Authority said HC drew conclusion that society being owner of the land is not responsible by relying on MOFA’s definition of promoter. But with RERA, the legal position has changed. RERA’s definition of promoter is comprehensive and clarifies that “redevelopment project is covered and that liability of the persons constructing or converting buildings into apartments and those who sell apartments to different persons shall be joint”.

“Such provision is not there in MOFA. The society by cancelling the development agreement of developer and revoking their power of attorney regains control and ownership of the sale component,’’ said member and adjudicating officer B D Kapadnis, concluding that the purchasers’ complaints are maintainable.

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