No RERA registration required for rehabilitation part of redevelopment projects in Maharashtra: Tribunal

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The Maharashtra Real Estate Appellate Tribunal (MREAT) has ruled that the rehabilitation part of a redevelopment project does not require registration under the RERA Act, 2016, if it does not involve marketing, advertising or selling.

Hearing a plea by a resident of Bandra in Mumbai, the tribunal said that unless and until there is a sale or publicity or advertisement, the registration of a rehabilitation project is not required, and therefore, provisions of RERA (Real Estate Regulation Authority) Act will not be applicable for such projects.

The MREAT clarified that though generally the project is registered, this does not mean that the rehabilitation part of the project is also covered under RERA Act.

"Normally the sanction is accorded to the entire project consisting of both these two components. As a result, there is a popular misconception that registration applies to the entire project including for the rehabilitation component, which is not the correct legal interpretation of the provisions of the Act," the judgment said.

The case

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Mehul R Thakkar

Special Correspondent|Moneycontrol

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The complainant Jay Thakural's father was the owner of a flat in the New Panchsheel Cooperative Housing Society. A developer had executed a development agreement with the society in April 2015 and a permanent alternative accommodation agreement (PMA) with the complainant's father in April 2015.

The developer got the intimation of disapproval (IOD), which is the first permit for construction, for the project in June 2016. However, the builder could not get the completion certificate.

Under the agreement with the builder, the complainant's father was to get a flat on the ninth floor of the redeveloped building. Subsequently, he gifted the flat to the complainant through a registered deed in August 2017.

Thakural filed a complaint in June 2021, stating that the project was stalled over various stages and at intervals. He further claimed that while the project was ongoing, it was still not registered, seeking directions from Maharashtra RERA (MahaRERA) to have the developer register the project.

MahaRERA's order

The MahaRERA, in its order of July 2021, rejected the complaint, according to the judgment issued by MREAT on August 12, 2022. The complaint was rejected on grounds that the project was stalled and cannot be termed as an ongoing project under Section 3 of the Act. Thereby, no direction was issued to register the project and the authority dismissed the complaint.

Order challenged in the tribunal

Thakural filed an appeal in the MREAT, arguing that MahaRERA has failed to consider the revised commencement certificate, which has been issued on April 26, 2019, and has not taken note of the revised updated commencement certificates. He claimed that the project is an ongoing one and required mandatory registration with MahaRERA under Section 3 of the RERA Act.

Thakural added that MahaRERA had erred in holding that the project is stalled and is not ongoing. Therefore, he urged to allow the present appeal, to set aside the impugned order of MahaRERA dated July 9, 2021, and direct the developer to register the project within a stipulated time and levy a penalty under Section 59 of the RERA Act.

Tribunal's judgment 

However, the tribunal set aside the appeal citing that redevelopment projects are not under the ambit of the RERA Act, 2016. In the judgment, the tribunal said, "Section 3(2) (c) of the Act (RERA Act), has specifically and expressly exempted the rehabilitation part of a redevelopment project from the requirement of registration, if it does not involve marketing, advertising or selling."

The judgment added, "Unless and until there is a sale or publicity or advertisement etc, the said registration of rehabilitation project is not required and thereby, provisions of Act will not be applicable for such projects."

The judgment added, "Redevelopment projects are of hybrid nature and rehabilitation components (PAA) do not fall within the purview of the Act (RERA Act). Thereby, flat taker appellant being in the rehabilitation component, is not entitled to any relief under the provisions of the Act and as such, complainant has no locus standi under the provisions of the Act."