MREAT orders RA Residences promoter to pay 2% penalty, distribute commercial sale proceeds

The Maharashtra Real Estate Appellate Tribunal has directed the promoter of RA Residences in Dadar East to deposit a 2% penalty on the project cost and execute a conveyance deed for the residential building. The promoter must also apportion sale proceeds from commercial units built using additional

MUMBAI: The Maharashtra Real Estate Appellate Tribunal (MREAT) has directed the promoters of RA Residences in Dadar East to deposit a penalty of 2 per cent of the project cost and execute a conveyance deed in favour of the society for the residential building, proportionate to the floor space index (FSI) consumed under the 2017 plan, along with its common areas and amenities.

The promoters were also directed to apportion among the allottees the sale proceeds from units in the commercial building constructed using additional FSI or transferable development rights (TDR) beyond the 2017 plan, and to demarcate and hand over 64 remaining guest-parking spaces to the society.

The society, represented by advocate Nilesh Gala, had initially approached MahaRERA alleging encroachment on mandatory guest-parking and recreational ground areas, unauthorised use of additional FSI, and construction and sale of ground-floor offices by encroaching on common areas. It later approached MREAT, contending that the 2017 sanctioned plan formed the basis of the agreements for sale but was substantially altered in 2021 without its or the allottees’ prior consent. It also alleged unauthorised consumption of FSI attributable to the society’s share and non-compliance by the promoters, including failure to execute conveyance and hand over building and common-area documents.

MREAT observed that the plan shown to allottees in July 2017 was revised and approved in January 2021. While the residential building’s built-up area or FSI increased marginally from 30,540.77 sq m to 31,769.76 sq m, the commercial building’s area rose substantially from 3,231.63 sq m to 7,473.74 sq m through additional premium FSI. The tribunal held that this substantial deviation required the promoters to obtain the allottees’ prior informed consent. It said consent must be specific and based on full disclosure, and found that the agreements did not provide sufficient details on the proposed use of TDR or FSI from other land.

MREAT further held that conveyance cannot be indefinitely deferred. Once a building is complete, an occupation certificate is obtained, possession is handed over, and the society is registered, the Section 11 obligation to execute conveyance arises and cannot be overridden by a contractual clause linking conveyance to completion of the entire project. It also held that once the development potential disclosed to the allottees is exhausted and the obligation to convey has arisen, any subsequently available additional FSI or TDR cannot be used for additional structures or floors.