The Maharashtra Real Estate Regulatory Authority has directed a developer to refund homebuyers in the 'Swami Krupaa' project after a 12-year delay. The project stalled due to a lack of approvals for upper floors and a lapsed registration. This ruling highlights the necessity for homebuyers to conduct proper due diligence and maintain clear payment records to protect their capital.
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has issued a directive to a Mumbai-based developer, ordering a full refund for two homebuyers involved in the 'Swami Krupaa' residential project. These units were originally booked in 2013 with a promised possession date of December 2014. Over a decade later, the homes remain undelivered, prompting the regulator to intervene under the provisions of the Real Estate (Regulation and Development) Act, 2016.
Construction and Approval Failures
The root cause of the deadlock lies in critical lapses regarding project approvals. While the developer sold units on the sixth and seventh floors, official records indicated that the construction was permitted only up to the fifth floor. Furthermore, the project’s official registration on the RERA portal was allowed to lapse without any application for an extension. These compliance failures effectively halted all progress, leaving the buyers without their homes for over 12 years.
Investor Protections Under RERA
This case serves as a significant example of how Section 18 of the RERA Act protects buyers from indefinite delays. The tribunal clarified that developers cannot cite municipal disputes or external economic challenges to avoid their contractual obligations. When a developer fails to deliver possession on the promised date, homebuyers have the legal right to seek a refund of their entire investment along with interest. This regulatory stance reinforces that statutory compliance, such as obtaining valid Commencement Certificates for every floor, is a non-negotiable requirement for developers.
Risks of Undocumented Payments
The ruling also shed light on the difficulties associated with undocumented financial transactions. In this case, the homebuyers claimed they had paid significant cash portions toward the property, but the developer contested these amounts. Because there were no formal receipts or electronic payment trails, the tribunal faced complexities in verifying the exact quantum of the investment.
For anyone looking to invest in under-construction properties, this highlights a vital lesson: always insist on banking channels for payments and ensure every transaction is backed by a receipt. Relying on verbal assurances or paying in cash creates substantial legal risk if the project enters a dispute.
Before finalizing a property purchase, investors should consistently verify the project’s status on the official RERA portal. This includes checking if the project registration is active, if the builder has received all necessary construction approvals, and if the timeline aligns with the project’s current construction stage. Tracking these details can help identify potential project risks before committing significant capital.