RERA Holds SAM Foundation Accountable For Selling Unregistered ‘Lake Shore Apartments’ Project

RERA Holds SAM Foundation Accountable For Selling Unregistered ‘Lake Shore Apartments’ Project

Orders it to refund ₹54,00,000 with interest to the complainant within 30 days

The Tamil Nadu bench of the Real Estate Regulatory Authority (RERA) has directed the builder, SAM Foundation, to refund the amount paid by the homebuyer for purchasing a flat in its project.

The bench comprising Sunil Kumar (Member), also imposed a penalty of ₹1 lakh on the developer for marketing, advertising and selling the unregistered project to the homebuyer.

In June 2017, the builder (respondent) informed the homebuyer (complainant) about its project 'Lake Shore Apartments' at Korattur.

On showing interest, the homebuyer was allotted a flat in the project, with an area of 1550 sq ft, including the common premises.

On 26 June 2017, an unregistered agreement for sale was entered between the homebuyer and the builder for a consideration of ₹12,31,259 for the land measuring 799 sq ft of undivided share. The same day, an unregistered construction agreement was also executed for a construction cost of ₹66,68,741, totaling ₹79,00,000.

Despite the homebuyer paying ₹54,00,000 to the builder and the lapse of four years since the execution of the construction agreement and sale deed, no significant progress was seen in the flat’s construction.

Aggrieved by it, the homebuyer filed a complaint before RERA, seeking a refund of the amount, along with interest, compensation, and litigation costs.

However, the builder contended that the project was built on an area of 294.5 sq mts, with a stilt floor, plus two floors that housed six dwelling units. Therefore, the project did not fall within the jurisdiction of RERA, and hence the complaint should be dismissed.

The RERA referred to the project brochure issued by the builder. It stated developing 22 luxury apartments in an area of 5.35 grounds, comprising four blocks with stilt floors and apartments on the first and second floors. This meant, the project was eligible for registration under Section 3 of the Real Estate (Regulation and Development) Act, 2016, and confirmed its jurisdiction.

The real estate authority observed that according to the construction agreement, the possession of the flat was to be handed over to the homebuyer by 20 July 2018. However, the photos of the construction site displayed that the project was far from complete.

The RERA thus held that the builder failed to fulfill its commitment under the agreement.

It ordered the builder to refund ₹54,00,000, with interest to the complainant within 30 days. He was also slapped with a penalty of ₹1,00,000 for selling and marketing the project without registration.