"Rehabilitation part of a redevelopment project does not require registration under RERA Act, 2016": MREAT

"Rehabilitation part of a redevelopment project does not require registration under RERA Act, 2016": MREAT

"…although generally the project is registered, it does not mean that the rehabilitation part of the project is also covered under RERA Act"

Rehabilitation part of a redevelopment project does not require registration under RERA Act, 2016 if it does not involve marketing, advertising or selling, as ruled by the Maharashtra Real Estate Appellate Tribunal (MREAT).

Whilst addressing a plea by a Bandra resident in Mumbai, the tribunal said that unless and until there is a sale or publicity or advertisement, the registration of a rehabilitation project is not required, and therefore, provisions of RERA (Real Estate Regulation Authority) Act will not be applicable for such projects.

"Normally the sanction is accorded to the entire project consisting of both these two components. As a result, there is a popular misconception that registration applies to the entire project including for the rehabilitation component, which is not the correct legal interpretation of the provisions of the Act," the judgment said.

The present complaint was filed by Jay Thakural, whose father was the owner of a flat in the New Panchsheel Cooperative Housing Society. A developer had executed a development agreement with the society in April 2015 and a permanent alternative accommodation agreement (PMA) with the complainant's father in April 2015.

The developer got the intimation of disapproval (IOD), which is the first permit for construction, for the project in June 2016. However, the builder could not get the completion certificate. Under the agreement with the builder, the complainant's father was to get a flat on the ninth floor of the redeveloped building. Subsequently, he gifted the flat to the complainant through a registered deed in August 2017.

Thakural filed a complaint in June 2021, stating that the project was stalled over various stages and at intervals. He further claimed that while the project was ongoing, it was still not registered, seeking directions from Maharashtra RERA (MahaRERA) to have the developer register the project.

However, the complaint was rejected by the MahaRERA, in its order of July 2021, on grounds that the project was stalled and cannot be termed as an ongoing project under Section 3 of the Act. Thereby, no direction was issued to register the project and the authority dismissed the complaint.

Aggrieved by the decision, the Complainant filed an appeal in the MREAT. However, the tribunal set aside the appeal citing that redevelopment projects are not under the ambit of the RERA Act, 2016. In the judgment, the tribunal said, "Section 3(2) (c) of the Act (RERA Act), has specifically and expressly exempted the rehabilitation part of a redevelopment project from the requirement of registration, if it does not involve marketing, advertising or selling."

The judgment added, "Redevelopment projects are of hybrid nature and rehabilitation components (PAA) do not fall within the purview of the Act (RERA Act). Thereby, flat taker appellant being in the rehabilitation component, is not entitled to any relief under the provisions of the Act and as such, complainant has no locus standi under the provisions of the Act."