MahaRERA orders landowner to take over housing project as developer ‘abandons’ it

According to the website of MahaRERA, the project in question is Luxury Empire Township Phase 2 and Phase 3, registered with MahaRERA in July 2017 under the name of Goldstar Realtors, with completion timelines of December 2022 and December 2024 respectively.

In all, 50 buildings were proposed with MahaRERA. However, 30 buildings are registered with MahaRERA. These would be in the form of 1 and 2 BHK flats, along with shops below the apartments.

According to the MahaRERA order, developer Goldstar Realtors started sale of flats and shops at the end of 2011, which continued till 2016 before registration with MahaRERA.

During this period, purchasers were promised possession within 48 months from the date of allotment of flats & shops. Goldstar Realtors collected 30 percent and 60 percent respectively, for flats and shops sold during 2011 to 2016. However, on the ground, no work was undertaken. In fact, the project has been almost abandoned since 2017.

Buyers approach MahaRERA

A group of around 160 buyers, also known allottees, formed an Association of Allottees (AOA) and filed a complaint with MahaRERA requesting the authority to immediately cancel the Registration of ‘Luxury Empire Township’, initiate investigation on misappropriation of funds, and initiate criminal prosecution against Goldstar Realtors and its partners. It sought revocation of the registration of the developer under sections 7 and 8 of the RERA Act.

Further, the buyers filed a complaint stating that the association should be allowed to complete the project by itself or by a new developer acceptable to MahaRERA. Following this, the homebuyers filed consent terms with MahaRERA accepting the landowner as the developer.

It is alleged that there is no construction activity an site since the year 2017. (Photo credits: Harish Gagwani)

Vishal Mutreja, Chairman of Association of Luxury Empire Township, Bategaon Boisar East, said, "I booked a 2 BHK apartment in 2013 and was expecting possession in a reasonable period of three to four years. However, it will require two more years and already about close to 10 years has passed.”

Mutreja added, “I am fortunate to be purchasing it as home for my family after retirement, but there are several buyers who are end users and are staying on rent despite booking the apartment around 7-10 years ago. Still, we now expect to get the possession in around two years as the landowner is expected to take over the project as developer.”

Another buyer, Harish Gagwani, said, "My wife had booked for a 160 sq ft carpet area shop in 2014. The cost of the shop was around Rs 10 lakh, of which I have already paid Rs 4.50 lakh, but there is no sign of possession till date. We are relieved as MahaRERA has given a landmark order in our favour, and the landowner will now be able to take over the project and complete the construction of the buildings. The landowner has the complete roadmap ready to bail out this project. But the biggest challenge right now in front of the landowner / developer is to implement the order to get uninterrupted support from various authorities on the project site."

What is the MahaRERA order?

The MahaRERA, in its order, dated July 5, 2022, said, "From the record it also appears that the promoter has abandoned this project and failed to take any steps for completion of this project. Hence, allottees and the respondent no.2 (landowner) have arrived at mutually agreeable terms and signed consent terms dated 23-05-2022 on record of MahaRERA on 28-05-2022. By the said consent terms, the landowner has agreed to complete this project, for which the allottees have given their consent. In view of the above, it is felt necessary to accept the consent terms filed by the allottees and the landowner in the interest of the allottees and to ensure the timely completion of this project."

The order further stated, "The consent terms filed by the parties is taken on record and the same are accepted. The rights of the allottees of this project stand protected under the provisions of RERA. The landowner shall take over the project and complete the same within the timeline as per the consent terms filed on record of MahaRERA. The request of the complainant for revocation of this project stands rejected since the project validity period obtained by the respondents for completion of this project from MahaRERA while obtaining the registration certificate is valid until 30-12-2028."

It further added, "The MahaRERA further noticed that both the respondents are the promoters as defined under Section 2(zk) of the RERA and they are liable to complete this project. If the respondent No.1 is unable to complete the project, the respondent No.2 is under obligation as a promoter to complete the project. The landowner to take further necessary action as mandated under the provisions of RERA and the relevant Rules made thereunder. The landowner shall protect and safeguard the bonafide rights of the allottees of this project and adhere to all earlier orders passed by the MahaRERA in the complaints filed with respect to this project."

Landowner says will have to take up the hardship of taking over the possession of the land for restarting the construction work. (Photo credits: Harish Gagwani)

Landowner to construct and give home at same rate

Dr Munir Gazi, the landowner of the project told Moneycontrol, I had signed a development agreement with the developer in 2010, and the developer was supposed to construct the project and deliver a portion of the constructed area to me within 48 months after the commencement certificate. However, the developer failed to do so and I terminated the agreement in 2015. However, despite this the developer managed to get the project registered with MahaRERA in 2017 by giving incorrect information and documents. The developer has also abandoned the project since 2017, and has not appeared for hearing in eight opportunities given by MahaRERA on various complaints lodged against them."

Gazi added, "In between, the buyers formed an association of allottees (AOA) and two buyers, Harish Gagwani and Vishal Mutreja, approached MahaRERA on whose order we have signed consent terms by which the buyers have accepted me as the developer, wherein my wish is to bail out them. The consent terms were also accepted by MahaRERA who passed a landmark order and made me the developer. I will invest a substantial amount to commence to ensure that the project is completed and about 309 buyers from whom the developer collected the money are given their apartments and shops."

Gazi further added, "I will be constructing 350 units initially and delivering 309 units to provide relief to the buyers. The remaining units will be sold from which I plan to recover my returns on the investment and land value. I will also recover the further balance payment from the buyers linked to progress on construction. On average, buyers have paid 40 percent of total price to the developer who was not responding /missing for the last three-four years. I have, as a good gesture, decided to hand over units at the same old price to the buyers without any escalation, though it is envisaged that I will have to incur additional cost due to hardship of taking possession of land, engaging agencies, etc other than increase in cost of cement/ steel and revised approvals."

Lawyers speak

Advocate Sanjay Chaturvedi who represented the buyers in MahaRERA, said, "It is a landmark order by MahaRERA that has to be considered under Section 7 of the RERA Act. There are only six to seven such orders in the history of MahaRERA where allottees have been given liberty to decide the future course of their stuck project. This order is good because it shows that buyers truly have a lot of power. Buyers in similar situations can look at this order to form an association and ensure they can get a favourable order from MahaRERA to take over stuck projects."

Developer's side

There was no response from Goldstar Realtors.