Can Developers Shrink or Commercialize the Clubhouse You Paid For? The RERA Rules Explained

The Real Estate (Regulation and Development) Act, 2016 (RERA) requires developers to construct projects in accordance with the sanctioned plans and specifications disclosed to buyers. Legal experts emphasize that any significant alteration to common areas, clubhouses, or other project-wide amenities necessitates the consent of at least two-thirds of the allottees.

For many homebuyers, the decision to purchase a flat is influenced as much by the promised lifestyle as by the apartment itself. Brochures often highlight sprawling clubhouses, landscaped parks, swimming pools, sports facilities, and exclusive community spaces. However, across several housing projects, buyers later discover that these amenities have been downsized, relocated, commercialized, delayed indefinitely, or, in some cases, never delivered.

The ongoing dispute involving the Boomerang Club at Jaypee Greens Wish Town in Noida has once again brought the issue of homebuyers' rights into focus. Residents and life members at Jaypee Greens club have alleged that the club, marketed as an exclusive lifestyle amenity, is being commercially repurposed and operated in a manner different from what was originally promised.

Industry experts say disputes typically arise when promised facilities are reduced in size, delayed indefinitely, relocated, or replaced with different offerings. A growing source of conflict is the ownership and management of clubhouses. Developers often retain control over these facilities even after residents move in, arguing that they are separate commercial assets. Resident groups, however, contend that such facilities were part of the original sales promise and should ultimately come under the control of apartment owners’ associations (RWAs) or cooperative housing societies.

Real estate experts note that the issue becomes especially contentious when clubhouses are opened to outsiders or used for commercial activities. A marketing head with a major developer pointed out that developers in stressed projects, like the Jaypee Greens Wish Town project in Noida, cannot afford to hand over the clubhouse to residents due to significant unused Floor Space Index (FSI) that could affect future sales.

According to property experts, developers increasingly retain ownership of clubhouses and associated amenities to generate significant income even from housing societies where nearly all inventory is sold out. “It serves as pure income for developers. In one case, a developer has been known to earn more than Rs 25 lakh per month by leasing various parts of the clubhouse facilities to different entities, such as the swimming pool to a major swimming academy or the gym to a major fitness chain,” said a Mumbai-based property consultant.

RERA mandates that developers construct projects according to the sanctioned plans and specifications disclosed to buyers. Legal experts state that any major change to common areas, clubhouses, or other project-wide amenities requires the consent of at least two-thirds of the allottees. The RERA law was designed to prevent developers from materially altering the product that buyers agreed to purchase.

Reetesh Singh, MD of Realistic Advisory and Consultancy, noted that according to RERA laws, the clubhouse is not intended for commercial use in any form. “Developer charges homebuyers a lifetime membership fee for clubhouses, and this facility is considered an integral part of the common amenities. Residents typically bear the costs associated with maintaining these facilities, and commercial exploitation can create conflicts,” Singh told Moneycontrol.

Legal experts advise that homebuyers can approach state RERA authorities, consumer commissions, or civil courts if promised amenities are altered, delayed, or commercialized contrary to original commitments. Ashwani Kumar, a legal expert and consumer rights lawyer, cited the famous Supertech Twin Towers Demolition case, where residents of the Supertech Emerald Court society obtained a Supreme Court order to demolish two 100-meter tall towers that were constructed on land earmarked for a park. “This was a fit case of misuse of the promised facility by the developer. The court held it illegal, establishing that changes in building plans, promised amenities, and society layouts cannot be done arbitrarily by the developer. Homebuyers can always move court or RERA authorities for redressal of such disputes,” he said.

Marketing brochures, allotment letters, builder-buyer agreements, and sanctioned plans often become crucial evidence in such disputes. Regulators and courts have increasingly taken the view that amenities promoted during project launches form part of the developer’s obligations rather than mere marketing claims.

In summary, RERA provides homebuyers with significant protections against the arbitrary alteration or commercialization of promised amenities. Homebuyers should be aware of their rights and take legal action if necessary to ensure that developers adhere to their commitments.