CIDCO Ordered to Register Land Schemes as Real Estate Projects by MREAT
The Maharashtra Real Estate Appellate Tribunal (MREAT) has ruled that the City and Industrial Development Corporation (CIDCO) must register its land sale schemes as real estate projects, upholding the rights of buyers under the Real Estate (Regulation and
CidcoMreatReal EstateReraMchiReal Estate MaharashtraOct 28, 2024
The origin of the complaint dates back to October 2018, when the MCHI raised concerns that CIDCO had not registered as a project promoter before initiating a scheme for the allotment and sale of land plots through tenders. MCHI argued that its members, as allottees, had rights under RERA, which designates CIDCO as a promoter within the legal framework. The complaint was initially addressed by the Maharashtra Real Estate Regulatory Authority (MahaRERA) in June 2019, but MCHI was not satisfied with the decision and appealed to the MREAT.
MREAT's Decision
After a thorough review of the case, the MREAT concluded that CIDCO's involvement in the land sale scheme constituted development work as defined under Section 2(t) of the Real Estate Act. The Tribunal determined that the various development activities undertaken by CIDCO—such as transforming raw land into approved layout plots—qualified as real estate projects. Given that these activities were executed by a recognized planning and development authority, the selling or marketing of any or all of these plots established it as a legitimate real estate project.
The MREAT further ruled that CIDCO indisputably held the designation of a promoter (Town Development) for its work, which involved subdividing land for sale. The Tribunal found the arguments presented by CIDCO's legal counsel to lack legal merit under Section 2(zk)(ii) of the Act, emphasizing that when the seller of the plots differs from the developer, both parties must be regarded as promoters under the law.
Obligations and Implications
The ruling mandated that CIDCO must adhere to the provisions of the Real Estate (Regulation and Development) Act, converting its schemes—both past and future—into compliant, registered projects before proceeding with the sale of any plots. This obligation stands irrespective of whether the dealings align with the Maharashtra Regional and Town Planning Act (MRTP) or the Non-Agricultural Land Development Rules (NMDLR), and regardless of CIDCO's responsibilities in delivering on-site or off-site infrastructure.
The MREAT's decision underscores the importance of transparency and regulatory adherence in land sales and development practices. It highlights the imperative for CIDCO to formally register itself as a promoter for its town development schemes, ensuring the protection of stakeholders and prospective buyers under the law. This ruling is expected to set a precedent for other developers, fostering a climate of compliance and accountability in the real estate market.
Conclusion
The implications of this ruling are far-reaching, potentially impacting the real estate industry in Maharashtra and beyond. By ensuring that CIDCO adheres to RERA, the MREAT has taken a significant step towards creating a more structured and trustworthy real estate market. This decision is expected to encourage other developers to follow suit, ultimately contributing to better protection for homebuyers and investors.
About CIDCO
The City and Industrial Development Corporation (CIDCO) is a statutory body established by the Government of Maharashtra in 1971. CIDCO plays a pivotal role in the planning and development of new towns and industrial areas in Maharashtra. Its primary objectives include the acquisition and development of land, the promotion of industrial growth, and the provision of infrastructure and civic amenities. CIDCO's projects are designed to support the economic and social development of the state, making it a significant player in the real estate and urban development sectors.
Frequently Asked Questions
What is the Maharashtra Real Estate Appellate Tribunal (MREAT)?
The Maharashtra Real Estate Appellate Tribunal (MREAT) is a judicial body established under the Real Estate (Regulation and Development) Act, 2016. It is responsible for hearing appeals against the decisions of the Maharashtra Real Estate Regulatory Authority (MahaRERA) and ensuring compliance with the Act.
Why did MCHI file a complaint against CIDCO?
The Maharashtra Chamber of Housing Industry (MCHI) filed a complaint against CIDCO because CIDCO had not registered as a project promoter before initiating a scheme for the allotment and sale of land plots through tenders. MCHI argued that this violated the Real Estate (Regulation and Development) Act, 2016.
What did the MREAT rule regarding CIDCO's land sale schemes?
The MREAT ruled that CIDCO's land sale schemes must be registered as real estate projects under the Real Estate (Regulation and Development) Act, 2016. The Tribunal determined that CIDCO's development activities qualified as real estate projects and that CIDCO must adhere to the provisions of the Act.
What is the Real Estate (Regulation and Development) Act, 2016 (RERA)?
The Real Estate (Regulation and Development) Act, 2016 (RERA) is a law designed to regulate the real estate sector in India. It aims to protect the rights of homebuyers, ensure transparency and accountability in real estate transactions, and promote fair practices in the industry.
What are the implications of the MREAT ruling for the real estate industry?
The MREAT ruling has significant implications for the real estate industry as it emphasizes the importance of regulatory compliance and transparency. It is expected to set a precedent for other developers, fostering a climate of accountability and trust, and ultimately contributing to a more structured and trustworthy real estate market.
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