Maha RERA makes only developer, not land owner, answerable to homebuyers

Maharashtra Real Estate Regulatory Authority (MahaRERA) has withdrawn its office order making land owners equally liable as that of builders and developers

Maharashtra Real Estate Regulatory Authority (MahaRERA) has withdrawn its office order making land owners equally liable as that of builders and developers under the Real Estate (Regulation and Development) Act, 2016, the Bombay high court (HC) was told last week.

Maharashtra Real Estate Regulatory Authority (MahaRERA) has withdrawn its office order making land owners equally liable as that of builders and developers (FILE)

Advocate general Ashutosh Kumbhakoni told a division bench of justice Naresh Patil and justice Rajesh Ketkar that the authority has withdrawn the order dated May 1 by which it had introduced definition of the term “co-promoter” in the Real Estate (Regulation and Development) Act, 2016.

The office order defined co-promoter as the person or organisation, who under an agreement with the promoter (builder or developer) of a real estate project, is allotted or entitled to a share of the total revenue generated from sale of apartments in the project or in terms of constructed apartments in the project.

Kumbhakoni was responding to a petition filed by seven city residents, who own a 12,531 sqm plot at Nahur and who have given the land for development to a private developer, Shivkripa Enterprises.

In the petition filed through advocate Vishwajeet Kapse they challenged validity of the office order primarily on grounds that the authority under RERA was not empowered to introduce any such new term into the enactment. “The impugned office order is tantamount to legislation,” stated the petition. “Respondent (MahaRERA) cannot legislate for the state, much less for the Union,” it added.

They took strong objection to the fact that the office order foisted a liability on land owners which was not contemplated either under provisions of the Maharashtra Ownership of Flats Act or under provisions of the RERA, 2016.

They said the authority under RERA failed to appreciate that the land owner, who is not himself the developer, does not undertake any construction activity and only parts with his rights as owner of the land to the builder or developer (promoter under RERA) to develop the land, and he has no further role to play in construction of the apartments and their sale to individual purchasers.

They withdrew the petition last week after Kumbhakoni made a statement to the effect that the office order has been withdrawn.