Varun Singh
This case will set a precedent, and also be a case law that will be spoken extensively in the real estate sector. The reason being, that Maharashtra Real Estate Regulatory Authority (MahaRERA) has held that a builder is responsible for representations made by a real estate agent to a homebuyer.
Earlier this month MahaRERA delivered a landmark judgement where homebuyers Aftab Shaikh and Nilofar Shaikh had approached the housing authority against, builders Glider Buildcon Realtors Private Limited and Omkar House.
There were multiple contentions of the home buyers including the one, that they invested in the property South Tower, located at Saat Rasta near Mahalaxmi station, on the representation made to them by the real estate agent that the project had a subvention scheme.
A letter of allotment was issued in August 2018 to the homebuyers for their booking of a flat measuring 1046.84 sq ft, carpet area in the building of which total consideration was above Rs 5 crore.
The homebuyers approached MahaRERA and they had many contentions, of which they mainly contended that believing the representation made to them that the said flat would be given under subvention scheme of 20:50:30 , they booked the flat, to which the developers subsequently denied by station that they cannot provide the subventions scheme. Hence, the homebuyers sought refund of the entire amount paid by them. The builder in this regard conceded that it never gave such commitment or advertisement to the homebuyers. However, the same was represented by the real estate agent.
MahaRERA noted, in the 14 page order, “Though the respondent no. 1 (Glider Buildcon) has not advertised that the project has subvention scheme, however, admittedly, the agent who acted an appointed by the respondent no. 1 has given such representation to the complainant (homebuyers). Since the agent acted on behalf of the respondent no. 1, for any such representation made by the said agent the respondent no 1 is responsible for the same. Admittedly, the respondent no. 1 has failed to provide the subvention scheme shown to the complainant.”
MahaRERA also noted that the homebuyers feel that they have been taken for a ride by the promoter, The complainants in this case are therefore entitled to seek refund for violation of RERA.
Dr Vijay Satbir Singh, Member-1, MahaRERA finally directed the builder to refund the entire amount paid by the homebuyers along with interest at the rate prescribed by RERA, i.e. Marginal Cost of Fund based Lending Rate (MCLR) of SBI plus 2% within sic months in the mitigating circumstance. The builder was also allowed to take benefits of mortarium period with regard to the payment of interest.
Adv Nilesh Gala who represented the complainants said, “The order is a landmark judgement, where promoters via their real estate agents give various commitments to flat purchasers, and thereafter promoter disowns these commitment. This order will bind the promoter who through their real estate agents make commitments Even under contract act, a principal is bound by the commitment made by the agent, this same analogy is applied by MahaRERA in this case.
Detailed emails sent to Glider Buildcon Realtors Private Limited and Omkar House got us no response.
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