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Booked a flat but developer changed midway? Original builder still liable, rules MahaRERA
Maharera order: Original developer remains liable for homebuyers' claims even after real estate project transfer due to compliance issues
The Maharashtra Real Estate Regulatory Authority (MahaRERA), in a recent suo motu order, has clarified that the original developer remains accountable for addressing the claims of existing homebuyers, even if the project is transferred to a new developer due to regulatory compliance issues.
The authority stated that the incoming developer bears no liability for past obligations towards earlier homebuyers.
This clarification was issued in relation to a stalled real estate project involving slum rehabilitation in Mumbai’s Andheri area, where the Slum Rehabilitation Authority (SRA) appointed a new developer following the default of the original one.
The case
The order pertains to a slum rehabilitation project in Mumbai’s Andheri area. The Slum Rehabilitation Authority (SRA) appointed a new developer after terminating the previous one due to alleged non-compliance.
The project, registered with MahaRERA in 2017, falls under the SRA's purview. In January 2023, the SRA terminated the original developer for allegedly failing to fulfil its construction and delivery obligations.
Subsequently, in March 2024, the SRA appointed a new developer to take over and resume the project's construction.
As per the declaration submitted by the former developer to MahaRERA, the project spans 2,460 square meters and comprises a single 20-storey building with 113 apartments intended for sale.
Of these, 48 units have already been sold to homebuyers, who are still awaiting possession.
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Homebuyers must raise claims with old developer, not the new one: MahaRERA
In its recent order dated May 16, 2025, the Maharashtra Real Estate Regulatory Authority (MahaRERA) clarified that homebuyers must direct their claims to the original (old) developer, not the newly appointed one.
MahaRERA emphasised that the project in Mumbai’s Andheri area is not a routine case of project transfer.
The transfer occurred because the Slum Rehabilitation Authority (SRA) terminated the old developer for defaulting on project obligations and subsequently appointed a new developer to complete the work.
According to MahaRERA, at the time of this transition, the new developer was instructed to reimburse all project-related expenditures incurred by the old developer. Once this reimbursement is completed, the old developer remains solely responsible for fulfilling all obligations toward the existing allottees (homebuyers).
“This arrangement, as set out by the SRA, ensures that the interests of existing homebuyers are protected while allowing them to pursue claims against the original developer,” MahaRERA noted.
To ensure a clear separation of responsibilities, MahaRERA has assigned the incoming developer a new registration number.
Meanwhile, the registration number of the old developer has been temporarily suspended to maintain regulatory oversight and ensure that it meets its commitments to existing homebuyers.
In summary, while the new developer will carry out construction going forward, it will not bear any liability for the commitments or defaults of the previous developer.
MahaRERA's final order
MahaRERA concluded the case by directing that the new developer be assigned a separate registration number and instructed to open a dedicated escrow account for the project.
The authority also issued clear directives to the original (old) developer: it must not market, sell, or advertise any apartments in the project going forward.
Additionally, the old developer is required to fulfil all obligations toward existing homebuyers and settle all pending claims.
MahaRERA further stated that if the old developer fails to comply with these directives, affected homebuyers may approach the Authority for appropriate redressal.
