26 February 2024 Property/Real Estate Law >> Property & Real Estate   |   RERA >> Property & Real Estate  

Homebuyers in India received a significant boost in protections recently, thanks to a key decision by the Maharashtra Real Estate Regulatory Authority (MahaRERA). In a case where an allottee (buyer) paid for a flat in an unfinished project, MahaRERA not only directed the developer to provide a refund with interest and compensation, but also included an investor in the project as jointly liable for the repayment.

Facts:

• The allottee paid the developer for a flat in a project but the construction remained incomplete.
• The allottee filed a complaint with Maha RERA seeking a refund with interest and compensation.
• During the proceedings, an investor in the project was also named as a party.

Court Order:

• Maha RERA directed both the developer and the investor to refund the allottee's money with interest.
• The investor appealed this decision, arguing they never received any payment from the allottee.

Court Conclusion:

• The Appellate Tribunal and subsequently the High Court upheld Maha RERA's order, holding the investor liable alongside the developer.
• The court's reasoning was based on the broad definition of "promoter" under RERA, which includes anyone associated with the construction or sale of flats, even those entitled to a share in the project, regardless of directly receiving payments from allottees. 

Significance:

This case clarifies that under RERA, investors in real estate projects can be held jointly liable with developers for fulfilling obligations towards allottees. This protects homebuyers by ensuring they have recourse against various entities involved in the project in case of disputes.