The Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed developer to give an undertaking that the firm will cover any losses suffered by five home buyers, who got refund orders for delayed possession last month, till the filing of an appeal with the appellate tribunal.
On September 27, 2018, MahaRERA had ordered the developer to refund the investments of five home buyers – Rahul Bhosale, Hitesh Shah, Riyaz Jetham, Alistair Gomes and Sachin Kadam – who had booked flats in Acropolis project in Virar through a subvention scheme in which buyers paid eight per cent of the flat consideration and the banks paid the remaining 92 per cent. The order was to be executed by the developer within 30 days from the date of the order.
The subvention scheme itself is a very big scam, in this scheme the builder gets almost 95% of the loan amount on signing of the agreement without laying a brick, unlike regular home loan where the bank pays to the builder as per progress of the work, the builder lures the home buyers on promise to pay EMI till he hands over the possession, but when builder fails to construct or give possession on time the liabilities comes on the home buyer and the home buyers becomes defaulter and not the builder, in subvention scheme builder charges 10% more then the market value which the buyer realises on the later stage, subvention scheme is design to cheat home buyers.
The developer approached MahaRERA again on October 11 and got a stay on the order till October 24. On October 24, the matter was heard again, and the developer sought extension of stay on the execution of the judgment till the end of 60-day appeal period, citing financial crunch to pay the decretal amount that needs to be paid before the Maharashtra Real Estate Appellate Tribunal.
According to Section 43 of RERA, the appellant has to deposit 50 per cent of the amount with the tribunal before the appeal can be heard.
During the hearing before MahaRERA member Madhav Kulkarni, Sulaiman Bhimani, who appeared for the home buyers, strongly opposed the stay petition arguing that home buyers will suffer monetary losses since they had purchased the flats with bank loans and are paying EMIs. He argued that Rahul Bhosale, who had taken two bank loans, had received a foreclosure letter from the bank stating that if dues are paid before a cut-off date, he will get a concession of Rs seven lakh. He argued that home buyers will suffer immediate losses if the stay is extended.
Kulkarni then directed the developer to file an undertaking to make good any losses suffered by the home buyers till the end of the 60-day appeal period which ends on November 26. The stay was granted after developer complied with the undertaking.
Sulaiman Bhimani Legal Consultant
Expert RERA & Co-operative Scty Matters
Human and Civil Rights Activist
President Citizens Justice Forum
G A Builder arm of RNA Corp. Cheats senior citizen Murlidhar Prabhu age 85 He is homeless for last 12 years since he gave his home for redevelopment to RNA corp. The Builder is not giving rent nor constructing the building he is at the fag end of his life, He filled a complaint in RERA for relief but got highly disappointed as RERA did not gave order in his favor nor gave any relief and he was advised to approach High Court as RERA can give relief to only new home buyers and not the existing members of redevelopment project this a big drawback of RERA I request PM Narendra Modi and CM Devendra Fadnavis to amend the act to incorporate provision for original members of redevelopment project and not tolet them at the mercy of Builders.
POSTED IN PUBLIC INTEREST BY
Sulaiman Bhimani Legal Consultant
Human and Civil Rights Activist
President Citizens Justice Forum
President of Janata Congress party (Mumbai District)
Sub: Non-Compliance and Non-adherence of RERA 2016 provisions by M/s. Runwal Developers in reference to their project ‘Runwal Elegante’
At the outset, we are in gratitude to you and your team on the immense work already executed under MahaRERA and thus we continue to reiterate our faith in your authority.
We would like to bring to your notice, the unscrupulous and ill-conceived actions by one M/s. Runwal Developers Builders having their registered office at Runwal and Omkar Esquare , 5thFloor, Eastern Express Highway, Sion (East), Mumbai – 400 022, (herein referred to as the ‘said developers’) who has several on-going projects in Mumbai and elsewhere in Maharashtra, but is not registering the same under MahaRERA, trying various disguises and camouflage by using words and terminology to his benefit, but which results in grave disadvantage to the innocent flat purchasers, thus defeating the very purpose of MahaRERA .
One of their projects is ‘Runwal Elegante’ registered as P 518 0000 3620 on the MahaRERA website, which actually comprises of Wing A, Wing B and Wing C, bearing Survey No.41 (Part) and New CTS. No. 620/B , 620/C and 620/D admeasuring 21,023 sq.mtrs situate lying and being at Village Oshiwara, Near Lokhandwala Complex, Andheri (West), Mumbai – 400 058 (Herein referred to as “said premise”)
We would like to highlight some of the deceitful methods used by M/s. Runwal Developers to avoid registration of their project and thus cheating and deceiving the flat purchasers, inspite of the implementation of RERA 2016.
(1) Unscrupulous and deceitful tactics employed to avoid registration of their projects:Even though MahaRERA is active and in force, in Maharashtra, M/s. Runwal Developers is forcing home buyers to take possession in the under- construction ‘said premise’ part of which is still under ‘Part Occupancy Certificate’. This building project is grossly incomplete having hardly any amenities ready, which are promised and agreed upon by the ‘said developers’, under the ‘Registered Agreements’ with flat – purchasers. Thus, the ‘said developer’ is stating white lies by implying that ‘Part Occupancy’ is as good as the completion certificate. By this, the ‘said developer’ is totally avoiding the registration of their full project under MahaRERA.
(2). The ‘said developer’, project, ‘Runwal Elegante’, in Andheri West comprises three Wings A, Wing B and Wing C. But the builder has registered only Wing A, terming it as ‘Tower A’, under MahaRERA, while conveniently showing Wing B and C as ‘Completed projects naming them as ‘Tower B and Tower C’. The ‘said developer’ has used the terms ‘Tower A, Tower B and Tower C instead of ‘Wing A, Wing B and Wing C’ thus clearly mis-leading MahaRERA.
Herein the builder has received ‘Part – Occupancy Certificate for Wing B and Wing C’, and thus using this as an excuse, the builder has registered only Wing A as Tower A, in MahaRERA and not registered Wing B and Wing C.
Once again please note that the builder is using the term ‘Tower’ instead of ‘Wing’ in the MahaRERA website. Hereto annexed and marked as Exhibit A is the copy of the RERA Registration.
(3). Thus the builder is breaking-up the project as ‘Phases’ and not registering the Wing B and Wing C under MahaRERA, while all three wings A , B and C are actually one and the same building. Hereto annexed and marked as Exhibit B is the copy of the layout which shows common podium, lobby and sky-lounge which interconnects all the three wings. By this deceitful method, he is now stating that he has received ‘Occupation Certificate’, and has released mis-leading advertisements in leading newspapers and hoardings all over Mumbai, saying ‘Full Occupation Received’. Hereto annexed and marked as Exhibit C is the copy of the mis-leading advertisement in Bombay Times dated Saturday July 22, 2017.
(4). Using this, to his advantage, the ‘said developer’ is issuing letters to the innocent and helpless flat- purchasers saying that he has received ‘Occupation Certificate’ and that the flat- purchasers should take possession for fit-outs, habitation etc. and should therefore pay the balance amount under consideration as per the ‘Registered Agreements’, between the ‘said developer’ and flat – purchasers.
This clearly exposes the wrongful methods employed by the ‘said developer’, and imposing undue pressure and duress onto the flat – purchaser to pay the full 100% of the consideration.
(5). Thus the Builder is clearly confusing flat purchasers and MahaRERA by assuming and considering Part Occupancy as Completion certificate and this avoiding the Registration of the building project altogether, and at the same time pressurizing the flat purchasers to pay additional money in a project which is nowhere near completion.
Thus, it is very clear that the ‘said developer’ has not received the Full Occupation Certificate and he has also not registered the project under MahaRERA.
(6). We hereby request you to make note of some exemplary Laws:
SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 13
(4) The promoter shall— (b) be responsible to obtain the completion certificate or the occupancy certificate, or both, as applicable, from the relevant competent authority as per local laws or other laws for the time being in force and to make it available to the allottees individually or to the association of allottees, as the case may be; there is no provision of part OC in RERA
SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 5
(zd) "Member" means the member of the Real Estate Regulatory Authority appointed under section 21 and includes the Chairperson;
(ze) "notification" means a notification published in the Official Gazette and the expression "notify" shall be construed accordingly;
(zf) "occupancy certificate" means the occupancy certificate, or such other certificate by whatever name called, issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructure such as water, sanitation and electricity;
Thus the ‘said developer’, is clearly sticking to his bad old ways, even though MahaRERA makes it mandatory for him to register all under construction and ongoing projects’
(7). The ‘said developer’ is pressurizing the flat purchasers to pay the balance consideration amount, threatening them about ‘terminating their registered agreements and in many cases even ‘terminating the registered agreements’. By making false statements, releasing mis-leading advertisements, hiding crucial facts the ‘said developer’ is thus creating gross criminal and civil offences.
(8). Mr. Chatterjee, please take immediate cognizance of this dishonest and deceitful developer M/s. Runwal Developers, who is taking undue advantage of words and terms and thus confusing the MahaRERA authorities, flat- purchasers and the general public at large and acting against several provisions of MahaRERA and other laws in force.
We request you to take prompt, stringent and immediate action, investigate the matter and penalize M/s. Runwal Develoeprs.
Your actions always speak louder than your words and it’s time the builder lobby heard this especially Ms/ Runwal Developers, and complied with the MahaRERA provisions which are mandatory and compulsory.
10th July, 2017, Mumbai: I handed over a letter to Mr Gautam Chatterjee, Chief of Maharashtra Real Estate Regulatory Authority (known as MahaRERA), with a sample of one prominent builder's draft of "RERA-compliant Sales Agreement", and the issues contained in that draft. In it, I pointed out the various shortcomings of this draft, which were not only unfair to the flat-buyer, but also untruthful and unlawful.
Mr Chatterjee spared some time to meet me and explained that those aggrieved by such unfair agreements thrust upon them by any builder should complain online after registering themselves as complainants on this website: https://maharerait.mahaonline.gov.in/login/UserRegistration , and file a complaint, accompanied by fees of Rs 5,000/-, which will then be heard by the Regulatory Authority or the Adjudicating Authority.
For the guidance of flat-owners and investors, I have reproduced below the letter that I submitted to Mr Chatterjee.
Sub: Builders are making a mockery of MahaRERA Dear Sir,
My activist friends and I are impressed by your deep knowledge and hard work. I have faith in Maharashtra’s Real Estate Regulatory Authority (MahaRERA).
However, the common people do not have such faith. People feel that MahaRERA will fail to make builders deal fairly with the common man. They feel that builders will stick to their bad old ways. There are many reasons people’s lack of faith. One major reason is builders are taking RERA very lightly. Even after MahaRERA came into force, builders are still forcing home buyers to sign agreements containing outright lies and many clauses that are against the buyers’ interests. Here is Exhibit A https://tinyurl.com/Ekta-MahaRera-Agreement
This is the Agreement draft of Ekta Tripolis, Goregaon, and is supposedly compliant with RERA. It is almost identical with agreement formats uploaded on MahaRERA website for other registered projects of the builder group called Ekta, owned and headed by Mr Ashok Mohanani. You are not pulling up this big builder for ramming such an agreement down the throats of home buyers, so why will the common man have any faith in MahaRERA?
Unfair & Untrue Clauses in Ekta builder’s “RERA Agreement”: 1) This “standard clause” is generally a false claim. Pg 12: "(cc) On demand from the Allottee, the Promoter has given inspection to the Allottee of all the documents of title relating to the said Land… and the plans, designs and specifications prepared by the Promoter's Architects… and of such other documents as are specified under the RERA and the Rules and Regulations made thereunder."
2) Allottees who may have paid as much as 100% of the consideration are today being told to falsely state that they have only paid 10%. Pg 15: "(iv) The Allottee has paid before execution of this Agreement, a sum of Rs. [●]/- (Rupees [●] only) (which does not exceed 10% of the Sale Consideration) as advance payment … " 3) This clause completely disempowers the buyer. Pg 16: "Time for payment of each installment is the essence of the contract. The Allottee hereby agrees, confirms and undertakes that an intimation forwarded by the Promoter, that a particular stage of construction is commenced or completed shall be sufficient proof that a particular stage of construction is completed. However, it is agreed that non receipt of such intimation requiring such payment shall not be a plea or an excuse by the Allottee for non-payment of any amount or amounts..."
4) This clause threatens to dispossess the buyer even if he pays the full consideration. "...Any payments made in favour of any other account other than mentioned hereinabove shall not be treated as payment towards the said Flat/Shop/Office and shall be construed as a breach on the part of the Allottee, in which event without prejudice to the right of the Promoter to charge interest at the prevailing rate of State Bank of India Highest Marginal Cost of Lending Rate plus 2% thereon on the amounts due, the Promoter shall be entitled to terminate this Agreement and forfeit 10% of the Sale Consideration along with brokerage charges (if any) as reasonable, pre- estimated, genuine and agreed liquidated damages and return balance (if any) to the Allottee within 30 (thirty) days from the date of such termination of the Agreement." RERA does not authorize the builder to terminate the agreement unilaterally on such grounds. 5) RERA does not envisage such forfeits. Pg 18 - "7. Voluntary Cancellation By Allottee. In the event, the Allottee desire/s to cancel the allotment of said Flat/Shop/Office for any reason whatsoever, then Promoter shall be entitled to forfeit the amounts equivalent to 10% (ten per cent) of the Sale Consideration and the Allottee shall not be entitled to such amount paid by him/her/them/it to the Promoter."
6) These arbitrary clauses dominate the buyer psychologically and financially: Pg 20 - "Event Of Default And Consequences - (i) The Promoter shall be entitled (but not obliged) to terminate this Agreement on the happening of any of the following events (“Events of Default”): ...(e) If the Allottee is/are, convicted of any offence involving moral turpitude and/or is sentenced to imprisonment for any offence for not less than six months; (f) If Receiver and/or a Liquidator and/or Official Assignee or any person is appointed of the Allottee or in respect of all or any of the assets and/or properties of the Allottee. (g) If the Allottee have received any notice from the Government in India (either Central, State or Local) or foreign Government for the Allottee involvement in any money laundering or any illegal activity and/or is declared to be a proclaimed offender and/or a warrant is issued against him... (i) If the Allottee fail/s to make payment of any outgoing/s, taxes, maintenance charges etc…” How is the builder concerned with bankruptcy proceedings, moral turpitude, etc? How can such extraneous factors enable a builder to dispossess his customer? 7) Arbitrary “standard clauses” for suppressing the buyer. “(ii) On happening or occurring of any of the Event of Default, the Promoter shall without prejudice to all other rights that the Promoter may have against the Allottee either under this Agreement, or in law or otherwise, give 30 (thirty) days notice to the Allottee to rectify/remedy such breach and during the notice period, the Allottee shall be liable to bear and pay interest at the prevailing rate of State Bank of India Highest Marginal Cost of Lending Rate plus 2% thereon on the due and payable amount. In the event Allottee fail/s to rectify/remedy the breach within notice period, then the Promoter shall be entitled (but shall not be obliged) to (i) forthwith terminate this Agreement (“Termination Date”) and (ii) forfeit/deduct all amounts mentioned in… above and balance if any, shall be refunded to the Allottee without any interest within 30 (thirty) days from the Termination Date. It is further clarified that any profit arising from sale of the said Flat/Shop/Office to the new Allottee shall be of the Promoter and the Allottee shall have no claim against the same."
Mr Chatterjee, Sir, such unlawful clauses may eventually be struck down if an allottee painstakingly challenges them, but in the meantime, they undermine public confidence in MahaRERA’s authority. Will you please promptly forbid such terrible agreement formats, and restore the people’s confidence? Sir, the public’s eyes are on you. Your actions must now speak louder than your words.
PS: After the onset of RERA, the older version of the agreement based on Maharashtra Ownership Flats Act 1963 (MOFA) may seem obsolete. But it is not so, because thousands of flat-buyers have signed such agreements quite recently, and consider themselves bound by their clauses. Ekta’s “MOFA agreement” format is even more horrendous than the RERA agreement. See Exhibit B. https://tinyurl.com/Ekta-Tripolis-MOFA-Agreement
For many years and decades, Ekta and such other builders have been spreading misinformation about the legal entitlements of flat-buyers. Mr Chatterjee, you now have jurisdiction to curb this. Will you please exercise your jurisdiction to the fullest?