The Maharashtra Real Estate Appellate Tribunal (MREAT) has upheld a landmark ruling by the Maharashtra Real Estate Regulatory Authority (MahaRERA) that homebuyers are within their rights to refuse possession if a property is delivered without the amenities promised in the sale agreement. The verdict came after two Mumbai residents contested possession of their high-end apartments over the absence of automated car parking facilities.
The case involved two buyers who had purchased adjoining apartments on the 12th floor of a Bandra West project, each spanning 2,460 sq ft, for a combined value of around Rs 13 crore. The agreement, signed in December 2015, set a possession date for June 2016 and included two automated parking spaces per unit, part of a mechanical “puzzle parking” system.
The contract carried a penalty clause if possession was delayed. The developer would pay interest at the rate of 18 per cent per annum on amounts received until handover.
What Went Wrong Between Buyers and Developer?
Possession was not offered until August 2017, more than a year late. Even then, the developer admitted that construction work was ongoing and had told the residents that they might face noise, dust, and restricted access to certain areas. The buyers were also told to bear the inconvenience.
The core dispute arose over parking. It was not possible to instal the automated system promised at the time of possession. Rather than providing underground parking, the developer provided open spaces on the ground level, which he claimed would be sufficient until the project was completed. It was argued by the buyers that the flats were not ready for possession because automated parking was not included in their purchase.
They also objected to the demand for the balance payment without deducting the penalty interest due for the delay.
How Did MahaRERA Rule?
In September 2018, MahaRERA sided with the buyers. It ordered the developer to pay each buyer simple interest at 10.50 per cent per annum on Rs 5.14 crore from July 2016 until the flats were handed over with all the agreed amenities.
The authority also directed a refund of over Rs 61 lakh charged for 118 sq ft of lift lobby space, with the amount to be adjusted against any outstanding dues. An additional Rs 20,000 per buyer was awarded to cover the cost of the complaints.
What Was the Developer’s Defence?
Challenging the order before MREAT, the developer argued that a part-occupation certificate had been obtained in August 2017. He argued that he had also provided open parking to all units up to the 12th floor as the automated system was not ready.
The developer claimed that most residents had accepted possession under these arrangements and that the buyers’ refusal was an attempt to avoid payment and extract further concessions. The absence of automated parking, he argued, was temporary and did not render the flats uninhabitable.
Why Did MREAT Uphold MahaRERA’s Decision?
There was no ambiguity in the agreements for sale: possession was to be delivered in a habitable condition along with all the listed amenities. There was evidence that the parking system was not operational at the time the possession was offered.
According to records, the developer assured the authorities that temporary open parking would suffice only until the automated system was in place, which had not happened when the offer for possession was made in August 2017.
As a result, MREAT determined that the possession offer was invalid, and that the buyers had acted within their rights by rejecting it. MREAT said that partial compliance with amenities is not sufficient when contractual terms clearly state what all must be delivered at the time of possession.
