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In a First, MahaRERA Penalises Home-buyer for Payment Delay to Builder

Moneylife digital team
12 October 2020

In an unprecedented case, Maharashtra Real Estate Regulatory Authority (MahaRERA) has asked a home-buyer to pay a penalty (in the
form of interest) to the developer for delay in payment. 
 
This judgement stands out in stark contrast since the Authority usually has to issue directives to developers to pay penalties to home-buyers
for delayed possession. 
 
In August 2019, the home-buyer Ms Suvarna Nazrekar had signed an agreement with the developer for an under-construction apartment
in Pune. However, the home-buyer had not made any payment despite several demand letters between August and December 2019. The
developer SMP Namrata Associates filed a complaint in MahaRERA against a home buyer for not making payment. 
 
In January 2020, the home-buyer sent a legal notice to SMP Namrata Associates for non-allotment of car parking space. The home-buyer
quoted the non-allotment of car parking space and the increased GST (goods and services tax) charges as the reasons for not making
payments to the developer. 
 
In its complaint, SMP Namrata Associates sought MahaRERA’s directions for cancellation of the agreement and forfeiture of the amount
paid by the buyer at the time of booking. The developer shared that it was willing to go ahead with the agreement if the buyer was willing to
make the payments along with interest. The home-buyer asserted that she was willing to pay the outstanding dues but sought directions be
issued to the builder to waive off the interest amount.
 
The home-buyer maintained that the complainant was a developer and so could not file a complaint against the allottee since there is no
provision under RERA to file such a complaint.
 
MahaRERA member, Vijay Satbir Singh held that the home-buyer, being an allottee, is liable to make payments in accordance with the
terms and condition of the sale agreement. He pointed out that the provision of section 19(6) of the RERA is required to be perused,
which reads as under:
“11(6) Every allottee, who has entered into an agreement for sale to take an apartment, plot or building as the case may be, under section
13, shall be responsible to make necessary payments in the manner and within the time as specified in the said agreement for sale and shall
pay at the proper time and place, the share of the registration charges, municipal taxes, water and electricity charges, maintenance charges,
ground rent, and other charges, if any.”
 
MahaRERA said that in case of any default on the part of allottee or the promoter, either party would be entitled to seek interest for such a
default as prescribed by the Real Estate (Regulation & Development) Act, 2016.
 
Mr Singh added in his order “Accordingly, if the respondent (buyer) has made any default in timely payment as per the agreement for sale,
she would be liable to pay interest for the delayed payment at the rate of Marginal Cost Lending Rate (MCLR) of SBI plus 2% as prescribed
under RERA.”
 
MahaRERA has directed the home-buyer to pay the builder within a month, failing which the developer would be entitled to terminate
the agreement for sale in accordance with the terms and conditions of the agreement for sale.
 
Comments

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swarke
2 years ago

The article should also explain if the home buyer does not honor the verdict then what is the course of action for developer ?

Invariably ..... if one looks at the arbitration proceedings at Stock Exchanges, wherein the verdict goes against an investor as an individual & he /
she does not honor it, there is no mechanism to panelize.

as against this, the broker OR developer can be easily panelized if they refuse to honor the verdict that may have gone against them !!

Reply

ssbh.dceo
2 years ago

BALANCED JUDGEMENT.

Reply

i_sakarwala
2 years ago

If the contractual obligations are not fulfilled as per the agreement.... Then the builder or developer has a right to seek recourse from the
constituted authority. In this case, the buyer was bound by the registered agreement to pay .
 Reply

ganeshiyer95
2 years ago

This is not good, now seeing this case, developers will use every tactic by use of law to bully homebuyers. This needs to be kept in check.

Reply

sunazrekar
Replied to ganeshiyer95 comment 10 months ago

The Builder Is Fraud . He Said That He Will Give Us The Covered Parking But He Didn't Give The Covered Parking In Agreement
And We Gaved Him 47 lakh rupees , Still He Wasn't Giving Parking And Even He Did A Fake Case On Me That I Am Not Giving Him
The Payment .

Reply

sunazrekar
Replied to ganeshiyer95 comment 10 months ago

The Builder Is Fraud . He Said That He Will Give Us The Covered Parking But He Didn't Give The Covered Parking In Agreement
And We Gaved Him 47 lakh rupees , Still He Wasn't Giving Parking And Even He Did A Fake Case On Me That I Am Not Giving Him
The Payment .

Reply

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