The Maharashtra Real Estate Regulatory Authority (MahaRERA) has clarified that homebuyers may seek a refund if significant disputes arise regarding changes to a property’s layout and design after booking, particularly if such changes result in the complete breakdown of the contractual relationship between the parties.

MahaRERA determined that the complainants were entitled to a refund of the total sum paid to the developer, plus interest, minus amounts paid for taxes, stamp duty, registration fees, and other statutory charges to government authorities.

The authority ordered the developer to reimburse the sum paid by the homebuyers, plus any interest, within 60 days of the order.

In its order, MahaRERA stated that the parties’ contractual relationship had “irretrievably broken down” and that neither was willing to proceed with the transaction. It stated that constraining either party to continue with the sale agreement would not serve the aims of justice or achieve the objectives of the Real Estate (Regulation and Development) Act. As a result, it determined that the complainants were entitled to seek remedies under Section 18 of the Act.

The case

The MahaRERA verdict involved homeowners who booked a property near Mumbai in July 2021 for more than ₹2 crore. In December 2021, the buyers signed a registered agreement for sale and paid around ₹50 lakh. Possession of the bungalow was expected for June 30, 2023.

However, disagreements emerged between the parties concerning alleged alterations to the bungalow’s layout and design, a reduction in its built-up area, changes to the parking configuration, and assurances given by the developer regarding compensation and restoration of parking access.

“Design changes and other changes were disclosed only shortly before execution of the agreement for sale, and they proceeded with the registration of the agreement solely on the basis of assurances extended by the developer regarding restoration of parallel parking access and compensation for the reduction in area,” the buyers informed MahaRERA.

The homebuyers opted to cancel the purchase in August 2022 due to project-related problems. According to the homeowners, the developer initially agreed to repay the full sum within 90 days, but then proposed a staggered payment schedule, delaying the refund. They further claimed that the developer issued forced demand notices and requested the execution of a cancellation deed, claiming false termination reasons, and that they refused to sign it.

Developer’s defence

In its answer to MahaRERA, the developer claimed that the homebuyer had failed to meet payment commitments under the bungalow purchase agreement. “All changes were duly disclosed, were necessitated by statutory approvals, and the complainants voluntarily executed the agreement with full knowledge of the final specifications,” the developer told MahaRERA.

The developer maintained that the complainants were bound by the provisions of the registered agreement for sale and could not contest the layout or specifications after signing the agreement.

The developer further claimed that the homeowners’ complaint about the reduction in built-up area was invalid because the agreement was based on the carpet area and plot area, with no contractual commitment about the built-up space. According to the developer, the homebuyers were attempting to raise issues outside of the scope of the agreement.

In its submission to MahaRERA, the developer asserted that all alterations to the layout and design were required by statutory requirements and authorization from competent authorities. It claimed that the alterations were legal, properly disclosed, and acceptable under the terms of the sale agreement. As a result, the developer maintained that no case of misrepresentation or breach of the RERA Act had been established.

MahaRERA’s verdict

According to the MahaRERA’s order, the record shows that arguments arose between the parties over the amended layout, parking configuration, and related promises, resulting in the rupture of the contract.

The MahaRERA stated that the respondent had agreed to cancel the transaction and refund the complainants’ funds, but the cancellation could not be completed due to disagreements over the proposed cancellation documents’ terms and recitals.

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has approved the deregistration of a stalled housing project in Pune after determining that all homebuyers had been refunded or had their claims settled, and there were no objections to the developer’s request to deregister the project.

According to the order, the developer requested deregistration because it no longer wanted to proceed with the project due to financial challenges, delays, and a preoccupation with other current ventures. The developer further informed MahaRERA that the project no longer had any allottees because Deeds of Cancellation had been signed with all customers who had agreed into Agreements for Sale, and all bookings had been duly cancelled.

MahaRERA authorized the deregistration request based on these representations and the absence of any ongoing claims from homebuyers.

The case

The case involves a developer trying to deregister a MahaRERA-registered project, claiming that it no longer intended to complete the development due to financial constraints. The developer also told the authority that all homebuyers’ claims for units in the property had been satisfied.

In its representation to MahaRERA, it stated, “The promoter (developer) no longer intends to proceed with the said project due to financial difficulties, pendency, and concern with other projects. That the said project now has no allottees (homebuyers), and that the promoter has officially completed Deeds of Cancellation of Agreements with all of the parties with whom the Agreements to Sale were signed, as well as cancelled the bookings in the said project.”

What does the MahaRERA order say?

MahaRERA analyzed documents and discovered that sales agreements with homebuyers had been terminated through filed cancellation deeds. In the instance of purchasers who had just made bookings, the developer produced papers indicating that refunds had been issued, as well as affidavits from the buyers confirming receipt of the monies paid.

The authority stated that notices were served to all allottees whose information had been provided by the promoter. However, none of them appeared before MahaRERA to contest the deregistration request or to question the developer’s claim that all dues and rights had been resolved.

Furthermore, MahaRERA issued a public notice allowing any interested parties to file objections to the proposed deregistration. No objections were submitted in response to the notice.It follows that if the Authority determines that a project registration number provided to a project is unlikely to be finished, the Authority is required to take awareness of the situation and take whatever actions are necessary to bring the project to a conclusion. The Authority sees no point in keeping a project registration number when there are either no allottees or allottees whose legal responsibilities have been met by the Promoter. Thus, the project is deregistered,” MahaRERA stated in its order.

Based on its findings, MahaRERA ordered the project’s deregistration and forbade the promoter from further marketing, booking, selling, or renting flats in the property.

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