RERA has no jurisdiction over redevelopment component, rules MahaRERA in a South Mumbai project dispute

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The Maharashtra Real Estate Regulatory Authority (MahaRERA) has made it clear that the RERA Act has no jurisdiction over redevelopment projects as it dismissed three complaints by tenants who were eligible for an apartment as part of a redevelopment project in Mumbai.

The MahaRERA asked the residents to approach the appropriate forum for complaints about redevelopment projects.

The three complainants were original tenants of 'Veer Vilas and Hendre Building' situated in Girgaon area of South Mumbai. The building was undertaken for redevelopment by Vardhman Developers under the MHADA scheme and the tenants signed a permanent alternate accommodation agreement in 2016.

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The tenants in their complaint to MahaRERA said the developer had agreed to provide a shop/ flat in the newly constructed building along with a monthly rental compensation of Rs 175 per square foot with a 10 percent annual increment till the actual date of possession in the newly constructed building.

However, the developer failed to make such compensation for the period from October 2017 to December 2020 and also did not hand over the possession of their respective premises (flat/ shop) within the stipulated period of 24 months with the additional grace period of six months, they alleged.

The complainants demanded that MahaRERA direct the developer to hand over the possession of their premises, to pay deficit payment and arrears followed by compensation.

During the hearings, the developer agreed for an amicable solution but later filed an application with the MahaRERA raising the issue of maintainability and seeking dismissal of the complaints.

The developer contended that the reliefs towards the compensation as sought by the complainants under the provisions of the RERA cannot be adjudicated by the MahaRERA as these complaints are beyond the jurisdiction of the real estate regulator. The complainants are not “allottees” as defined u/s 2(d) of the RERA but “tenants” of the cessed building which was undertaken for redevelopment, the developer argued.

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MahaRERA through its order dated December 28, 2022, cited an earlier order of the Maharashtra Real Estate Tribunal wherein in a similar situation RERA Act was not relied upon. In its order, the regulator stated that the redevelopment component of a real estate project is not covered under the purview of the RERA Act.

The order in this context stated, "In view of the aforesaid facts about the maintainability of these complaints and in view of the explicit provision under section 3 (2)(c) of the RERA, the MahaRERA is of the view that the redevelopment component does not fall within the purview of the RERA. Hence, the MahaRERA has no jurisdiction to decide these complaints on merits."

The order added, "However, the complainants are at liberty to approach the concerned competent authority as provided under the MHADA Rules, 1986 agitating their grievances about rent/ compensation if they so desire. Consequently, the present complaints stand dismissed as not maintainable before the MahaRERA. Hence, no further hearing is required to be given in these complaints."

Advocate Nilesh Gala, a lawyer representing Vardhman Developers in the case said, "It is a legally settled position in law that the rehab components i.e. old tenants, society members, slum tenements are not covered under RERA Act, and same has been now cleared in the above order of MahaRERA, which is following the view taken by appellate tribunal earlier."

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