Maharashtra Tribunal Orders CIDCO to Register Land Schemes as Real Estate Projects
This decision by the Maharashtra Real Estate Appellate Tribunal (MREAT) underscores the importance of regulatory compliance in real estate development, ensuring better protection for stakeholders.
Real EstateRegulatory ComplianceCidcoMreatMchiReal Estate NewsOct 28, 2024
The complaints first emerged in October 2018 when MCHI raised concerns that CIDCO had not registered as a project promoter before starting a scheme for the allotment and sale of land plots through tenders. MCHI argued that its members, as allottees, had rights under the Real Estate (Regulation and Development) Act of 2016, which classified CIDCO as a promoter within the legal framework.
The MREAT carefully deliberated on the matter and concluded that CIDCO's activities in transforming raw land into approved layout plots qualified as real estate projects under Section 2(t) of the Real Estate Act. The Tribunal found that the development work undertaken by CIDCO, a recognized planning and development authority, and the subsequent selling or marketing of these plots established it as a legitimate real estate project.
Moreover, the MREAT ruled that CIDCO indisputably held the designation of a promoter for town development, which involved subdividing land for sale. The Tribunal dismissed the arguments presented by CIDCO's legal counsel, citing Section 2(zk)(ii) of the Act, which mandates that both the seller and developer be treated as promoters when they are different entities.
The ruling mandates that CIDCO must comply with the provisions of the Real Estate (Regulation and Development) Act. This includes registering its schemes—both past and future—as compliant and registered projects before proceeding with the sale of any plots. This obligation applies regardless of whether the transactions align with the Maharashtra Regional and Town Planning Act (MRTP) or the Non-Agricultural Land Development Rules (NMDLR), and irrespective of CIDCO's responsibilities for on-site or off-site infrastructure.
The MREAT's decision underscores the importance of CIDCO adhering to the regulations set forth in the Real Estate (Regulation and Development) Act of 2016. It emphasizes the need for transparency and regulatory compliance in land sales and development practices. This ruling is expected to enhance stakeholder protection and pave the way for a more structured and trustworthy real estate market in the region.
The implications of this ruling could extend beyond CIDCO, potentially influencing other developers to adopt similar practices and prevent similar legal disputes. By fostering a climate of compliance and accountability, the real estate industry may become more structured and reliable for all participants.
Frequently Asked Questions
What was the main issue in the dispute between MCHI and CIDCO?
The main issue was whether the land sale transactions conducted by CIDCO constituted real estate projects as defined by the Real Estate (Regulation and Development) Act of 2016, and whether CIDCO had registered as a project promoter.
What did the MREAT conclude about CIDCO's activities?
The MREAT concluded that CIDCO's activities in transforming raw land into approved layout plots and the subsequent selling or marketing of these plots qualified as real estate projects under Section 2(t) of the Real Estate Act.
What is the significance of the MREAT's ruling?
The ruling highlights the importance of regulatory compliance and transparency in real estate development, ensuring better protection for stakeholders and prospective buyers.
What are the obligations imposed on CIDCO by the MREAT?
CIDCO must adhere to the provisions of the Real Estate (Regulation and Development) Act, registering its schemes as compliant and registered projects before selling any plots.
How might this ruling impact the real estate industry in the region?
The ruling could foster a climate of compliance and accountability, encouraging other developers to adopt similar practices to prevent legal disputes and contribute to a more structured and trustworthy real estate market.
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