There have been a number of instances that have seen real estate companies fleeing after abandoning their plans. Recently, reports of absconding homebuyers have been brought to the attention of the regulator.

The Maharashtra Real Estate Regulatory Authority (MahaRERA) recently issued an order to an individual who bought a house in a real estate development located in Thane close to Mumbai to pay the fees and interest as per the contract to purchase an apartment that was sold to Macrotech Developers in July 2021.

The MahaRERA ordered the developer to revoke the allotment given to the buyer of the property in the event that the payment due wasn’t made.

This is the case.

Macrotech Developers, operating under the name of Lodha, claimed that the homeowner was a fugitive after having paid 0.9 percent of the sum amount of Rs 1.33 crore and had not paid the rest of the amount or obtained possession of the house despite numerous reminders.

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The developer wanted to sign a deed that would cancel selling the property. Lodha told the regulator it did not have an order to terminate the contract and instead gave possession to a homeowner.

The contract for the sale of the apartment was signed on 30 July 2021 in the Platino project in Thane. The hearings were held, but the homeowner was not present and did not file a response.

Can a developer seek cancellation if a homebuyer defaults?

The MahaRERA, in its notice that was issued on 13 September 2023, stated that the occupation document for the construction was published in January 2019, and buyers were required to pay the mortgage according to the contract and according to the timeframes specified.

“It is clear that in case the party to the agreement (respondents herein) make a default, the other party (complainant promoter herein) has every right to act as per the terms for default mentioned in the said agreement,” the MahaRERA stated in its decision. “It is inferred that homeowners have not fulfilled their obligation to pay instalments on time as stipulated under the Section 19 (6) of the Act. Thus, the homebuyers are in breach the provisions of Section 19 (6).”

What is Section 19 (6) of the RERA Act?

Section 19 (6) of the Real Estate (Regulation and Development) Act stipulates that every homeowner who has signed a contract to purchase a plot, flat, or structure must pay in the way and at the time specified in the purchase agreement.

 

MahaRERA’s orders

The MahaRERA has stated in its ruling that homebuyers must fulfill their obligation to pay the installments due three weeks after they receive the notice, with interest being paid at the rate prescribed. The interest is due at the time of the installments until the day the installments have been paid, the regulator stated.

“In the event the homebuyers fail to come forward to execute the cancellation deed, the complainant promoters shall file a non-execution application (non-compliance) against the respondents in the captioned complaint before this authority (MahaRERA) to take further action,” MahaRERA added in its decision.

Macrotech Developers did not respond to inquiries via email regarding the issue.

Similar to case

Moneycontrol has reported the same case that took place on 27 September 2023, where MahaRERA ordered nine homebuyers from Pune to sign cancellation deeds in the event that they failed to make payment due after the construction company GERA Developments filed a complaint against GERA Developments.

GERA Developments alleged the nine homeowners had paid partial amounts to purchase houses and executed sale agreements between 2019 and 2020. However, they were unable to make the remaining payments even after demand letters and payment reminders were issued regularly.