MahaRERA orders developer to refund homebuyers: 7 checks to make before booking a flat

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed a developer to refund amounts that buyers were able to establish they had paid for flats, along with applicable interest.

The case serves as an important reminder for homebuyers: an allotment letter or a RERA registration number does not automatically mean that the particular flat you are buying has been approved for construction.

The dispute involved the Swami Krupaa project, where buyers had booked flats on the sixth and seventh floors. However, the Commencement Certificate (CC) on record permitted construction only up to the fifth floor. The buyers said they were assured that approvals for the additional floors would be obtained later.

According to the MahaRERA order, the CC dated October 22, 2010, permitted construction only up to the fifth floor. Despite this, the buyers had allotment letters for Flat 603 on the sixth floor and Flat 703 on the seventh floor.

The buyers said they booked the flats after being told that the necessary approvals for the additional floors would be secured subsequently.

The order also noted that architect certificates issued in 2017 and 2019 did not show progress on the upper floors. No later approvals or relevant architect certificates were produced to establish that construction on the sixth and seventh floors had received the required sanction.

For a homebuyer, the takeaway is simple: don't just ask whether a project has a Commencement Certificate. Check what the certificate actually allows the developer to build.

More importantly, make sure the specific floor and flat you are being offered are part of the sanctioned construction.

What experts say homebuyers should verify?

The documentary evidence played an important role in the MahaRERA proceedings. Records relating to payments, the project's incomplete status, the lapsed registration, the absence of subsequent approvals, and the failure to execute agreements for sale collectively supported the buyers' case.

For new homebuyers, this underscores why verbal assurances from a developer's sales team should not be taken as evidence that a required approval has been obtained.

Buyers should independently examine the Commencement Certificate, sanctioned building plans, floor-wise approvals, RERA registration details and the current status of the project before committing substantial funds.

In practical terms, a buyer should ask the developer to produce the approval specifically covering the floor and unit being purchased. If the promoter claims that an additional floor was approved later, the buyer should obtain the actual approval document and independently verify it, rather than relying solely on an oral assurance.

Check RERA records and payment documents

Buyers should also compare the project's registered plans with the exact flat being offered. The stated possession or completion date should be verified to ensure it remains current, and any subsequent approvals cited by the promoter should be available in documentary form.

Approval-related due diligence is only one part of the process. There is also an important distinction between having paid money and being able to establish those payments in a regulatory or judicial proceeding.

Homebuyers should therefore make payments through identifiable banking channels wherever possible and preserve receipts, acknowledgements and other contemporaneous records issued by the promoter.

This becomes particularly significant when any portion of the consideration is sought in cash, as establishing the payment trail can become more difficult.

Seven checks before paying for a flat

1. Commencement Certificate: Check which floors and construction the CC actually permits.

2. Sanctioned plan: Verify that the exact floor and flat match the approved building plan.

3. Subsequent approvals: If additional floors have allegedly been sanctioned later, demand and verify the actual approval document.

4. RERA records: Check the project's registration, sanctioned plans, progress filings and other disclosures.

5. Agreement for sale: Ensure that the promoter executes the required agreement and that the unit details correspond with the approved plans.

6. Payment trail: Prefer identifiable banking channels and retain receipts and written acknowledgements for every payment.

7. Written promises: Any assurance regarding future approvals, construction or possession should be documented. Buyers should avoid relying solely on verbal commitments from sales representatives.