Land Selling Public Bodies Can't Be Held as Promoters, Rules MahaRera
MahaRera's landmark decision states that public authorities selling land to developers cannot be considered promoters, unless they are involved in off-site infrastructure development.
MahareraReraCidcoCredai MchiReal Estate RegulationReal Estate MaharashtraJul 12, 2024
The builders had argued that Cidco, being a public authority, should be made a co-promoter in their projects since they delay their obligations after selling plots, causing project delays and rendering builders liable. They contended that Cidco, as the plot owner, must be classified as a promoter under the Real Estate (Regulation and Development) Act, 2016 (Rera).
However, MahaRera Chairperson Gautam Chatterjee ruled that Cidco's sale transactions involve the sale of immovable property where development permissions are yet to be granted by the competent authority. Such transactions, he stated, do not fall under the definition of a real estate project.
The order added that Cidco can be considered a promoter alongside the builder in cases where Cidco is mandated to develop 'off-site infrastructure' around the plot. This clarification is expected to bring relief to builders who have been facing project delays due to Cidco's sluggishness.
Information
MahaRera is the apex authority responsible for regulating and promoting the real estate sector in Maharashtra. Established under Rera, its primary objectives include protecting the interests of homebuyers, promoting fair play, and ensuring transparency in real estate transactions.
Cidco, or the City and Industrial Development Corporation, is a Maharashtra government undertaking responsible for developing and managing infrastructure projects in the state.
CREDAI-MCHI (Raigad) is a local chapter of the Confederation of Real Estate Developers' Associations of India (CREDAI), a national organization representing the interests of real estate developers across the country.
Frequently Asked Questions
Can a public authority selling land to developers be considered a promoter?
No, according to MahaRera's ruling, a public authority selling land to developers cannot be considered a promoter unless they are involved in off-site infrastructure development.
Why did builders argue that Cidco should be made a co-promoter?
Builders contended that Cidco delays its obligations after selling plots, causing project delays and rendering them liable, and therefore, Cidco should be held accountable as a promoter.
What is the definition of a real estate project according to MahaRera's ruling?
According to MahaRera's ruling, a real estate project involves the sale of immovable property where development permissions have been granted by the competent authority.
What is off-site infrastructure development?
Off-site infrastructure development refers to the development of infrastructure around a plot, such as roads, utilities, and amenities, which is typically the responsibility of the plot owner or local authorities.
What is the purpose of MahaRera?
MahaRera's primary objectives include protecting the interests of homebuyers, promoting fair play, and ensuring transparency in real estate transactions.
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