‘Developer bound to disclose construction plan to buyer’

  • Kanchan Chaudhari, Hindustan Times, Mumbai
  • Updated: May 10, 2016 00:19 IST

A developer is legally bound to disclose to flat purchasers the entire construction plan and title deeds of the land on which the construction is proposed, the national consumer commission has held.

The commission held that under the Maharashtra Ownership Flats Act, 1976, the developer is also bound to mention the specific date of handing over the possession of the ready flat to the purchaser.

“Section 3 (2) of MOFA requires the promoter to make true and full disclosure of his title to the land on which the building is to be constructed and give inspection of the plans and specifications of the said building to the buyer,” said the national consumer commission, while allowing a complaint filed by Pune resident Rajiv Nohwar.

In June 2014, Nohwar had booked a flat with a carpet area of 1,660 sqft for Rs1.68 crore in a project at Pune. The complainant alleged after he paid a substantial amount, the developer sent a draft copy of the sale deed to him. When he objected to certain clauses being one-sided, the developer issued a notice of termination, despite his willingness to make the balance payment.

Nohwar then approached the national consumer commission, challenging the cancellation of his booking and seeking a direction to the developer to delete all “illegal clauses” in the draft and incorporate all amenities shown in the developer’s brochure.

The developer contested the complaint, stating the complainant failed to make payments according to the schedule fixed by the agreement between them. The developer said the amenities such as golf club, gymnasium, cricket ground mentioned in the brochure were not being developed as common amenities for the association of flat purchasers, but were leased out to a separate entity.

The commission held the complainant was justified in refusing to sign the agreement.

However, noting that all other flat purchasers have accepted and signed agreements in terms of the draft given by the developer, the national commission gave an option to the complainant either to accept a similar draft as a sale deed or accept a refund of Rs1.58 crore that he has paid to the developer with 12 % interest an annum from the date of payment, and a sum of Rs10 lakh towards compensation.

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