Unfair Practice: Builder Sells Flat Of Which He Didn’t Have Approvals

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Mumbai builder was found to be involved in “unfair practice” by promoting sale by adopting  unfair method. The builder represented that he has approval which in reality he did not have. Asked to refund money by MahaRERA.

By Varun Singh

There are many cases, where a builder oversells, at times they even sell flats for which they do not even have approvals.

A similar case knocked the doors of MahaRERA, where the authority held the builder being involved in a kind of unfair practice.

Rashiquah Ahmad approached MahaRERA against the developer Cordcon Builders Pvt Ltd.

Ahmad had booked an apartment in the building Indian Ocean located at Andheri, Mumbai.

The booking was carried out via a Letter of Allotment dated October 22, 2015 and Memorandum of Understanding (MoU) executed on October 27, 2015.

The homebuyer alleged that the builder illegally sold them an apartment on 17th floor by making false representation that approval would be obtained.

Further, they stated that in spite of having paid 81% of the amount, the builder failed to  obtain approval and enter into an agreement for sale.

Homebuyer alleged that the developer has permission to construct only up to 15 floors as per the MCGM approvals and has not been able to acquire further approvals till date.

The buyer asked that the developer be directed to refund the amounts paid along with interest and payment of arrears of compensation towards rent at promised rate from November 2018 till the date of refund.

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Builder submitted the he does not have the requisite approvals for the 17th floor and has been paying compensatory rent to the homebuyer.

Developer was also willing to adhere to the MoU executed between the parties.  

The developer was willing to offer an alternate apartment to the homebuyer. But the counsel for the homebuyer stated that the alternate apartment offered was not to the liking of the homebuyer.

Counsel for the homebuyer also informed that by a letter dated February 1, 2019 the builder had given the option to the homebuyer to mutually end the transaction of sale of the apartment, in case the developer fails to provide possession of the apartment before the period ending December, 2019.

Gautam Chaterjee, Chairman, MahaRERA held that, the registered project is till up to 16 slabs of super structure and the homebuyer’s apartment is not part of the registered project.

Hence, strictly speaking,  the homebuyer is not an allottee in the registered project

Gautam Chaterjee, Chairman, MahaRERA

Chaterjee in his order dated September 30, 2020, noted, “though the Complainant’s apartment is not registered with MahaRERA, the act of the developer to take money from the Complainant for a proposed apartment and issue him an allotment letter, with an MoU in the registered project, amounts to the promoter being involved in a kind of “unfair practice” by promoting sale by adopting  unfair method like representing that the promoter has approval which he does not  have.”

Thus the builder was directed to refund the amounts paid by the homebuyer as per the terms agreed between the parties in the MoU and the builder’s email dated February 1, 2019.  

Also Read: Coworking Spaces In Residential Projects?

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