No agreement for sale? No relief under RERA

Real estate regulators may not provide relief to home buyers if the agreement is not executed and registered

If you want to be to benefit from the Real Estate (Regulation and Development) Act or RERA, do ensure that you have executed the agreement for sale with the developer and registered it as soon as you buy a property. In the absence of this, there are chances that the real estate regulator in your state may dismiss your case if you seek relief.

A buyer and developer sign and register the agreement for sale at the time of payment of stamp duty and registration of property.

It's a legal document that states property details and other terms and conditions.

Recently Maharashtra real estate regulator (MahaRERA) dashed hopes of around 2,500 home buyers who have bought flats from a developer in Mumbai — Bhagtanis, the promoter of Jaycee Homes. Buyers were given only allotment letters. Recently, when some of them approached MahaRERA to seek relief for the delay , it dismissed their complaints as the buyers had not registered the agreement for sale. It ruled that in the absence of the document, the provisions of section 18 of RERA, which deals with compensation for delays, do not apply.

“The plain words of Section 18 clearly indicate that there must be an agreement for sale for invoking section 18. The allottee gets right to get the refund of his money only when the promoter fails to complete apartment in accordance with the terms of agreement for sale or he is unable to give possession on the date specified in the agreement. Therefore, in the absence of any agreement for sale, section 18 has no role to play,” said the order.

Between 2012 and 2013, the developer sold around six projects at the pre-launch stage in various parts of Mumbai. “Buyers were only given allotment letters as work had to commence. But the projects are still under initial development stage,” says Vipul Saxena, a buyer in Bhagtani Serenity at Powai. When MahaRERA started operation, the developer also listed properties with it.

Lawyers feel that other regulators can also “strictly” interpret the law in the same manner. This will add to woes of buyers in under-construction projects after all that they have gone through in the past many years. “Considering the fact that the intent of RERA is to safeguard the interests of the buyers, a more liberal interpretation should have been adopted by the Maharashtra RERA, including taking into consideration the fact that the project was an ongoing project,” says Vivek K Chandy, Partner at J Sagar Associates.

Lawyers also say that developers in ongoing projects can use this ruling to escape the law by only signing allotment letter, and not executing an agreement of sale. Under the RERA, a developer is allowed to collect only 10 per cent of the house cost with an allotment letter. If a buyer pays anything beyond that, the two parties need to execute an agreement for sale.

If you are a buyer in an ongoing project, ensure that the agreement for sale is signed and registered. Getting relief under RERA is easier and faster compared to other options such as consumer court.