Telangana RERA Imposes Penalty on Builder for Unilaterally Cancelling Homebuyer Allotments
The Telangana Real Estate Regulatory Authority (RERA) has imposed a penalty of Rs. 8.57 lakh each on a builder and a real estate agent for unilaterally cancelling the allotments of 14 homebuyers, violating the provisions of the RERA Act, 2016.
ReraReal EstatePenaltyHomebuyersBuildersReal EstateFeb 03, 2025
Srinivasa Rao and Laxmi Narayana Jannu, has imposed a significant financial penalty on a builder and a real estate agent for unilaterally cancelling the allotments of 14 homebuyers and violating the RERA Act, 2016.
The penalty of Rs.
8.57 lakh each is a clear signal of the regulatory body's commitment to upholding the rights of homebuyers.
of the CaseThe homebuyers purchased flats in the Tulasi Bhagyanagar Project located in Dundigal by paying substantial amounts ranging from Rs.
15 lakhs to Rs.
30 lakhs to the builder (Respondent No.
1).
The builder executed agreements for sale in favor of the homebuyers and promised to register these agreements within 10 days.
However, the builder failed to fulfill this promise, and after a delay of four years, unilaterally cancelled the allotments.
Aggrieved by this, 14 homebuyers from the project filed complaints with the RERA.
In response, the authority issued an interim order directing the builder not to sell, transfer, or create any third-party interest in the flats until the complaints were resolved.
Observations and Final Directions by the AuthorityThe Telangana RERA observed that the builder's act of cancelling the allotments was aimed at evading liability.
This action was in direct violation of Section 11(5) of the RERA Act, 2016, which stipulates that a builder can only cancel an allotment in accordance with the terms of the agreement for sale.
The agreement's terms clearly stated that cancellation was permissible only if the homebuyer failed to pay the sale consideration, a condition that was not met in this case.
The RERA also found that Respondent No.
2, who acted as the real estate agent by executing agreements on behalf of the builder, engaged in unfair trade practices.
Despite the lack of a formal agreement between the two respondents, the authority found evidence suggesting otherwise.
Respondent No.
2 falsely represented themselves as the true owner and promoter of the project, leading to their recognition as the real estate agent and subsequent liability under the RERA Act, 2016.
As a result, the RERA directed the respondents to register the flats in favor of the homebuyers and imposed a penalty of Rs.
8,57,697 each on the builder and Respondent No.
2 for the unilateral cancellation of the agreements of sale and for violating the provisions of the RERA Act, 2016.
Case Details- Case Sri D.
Vinod & Sri M.
Sathish Versus M/s Green Metro Infratech Projects Pvt.
Ltd.
& another, along with 13 others- Citation COMPLAINT NO.32 OF 2024, along with 13 others- Date 24th January 2024
The RERA's decision underscores the importance of adhering to the legal and ethical standards set forth by the RERA Act, 2016, and serves as a caution to builders and real estate agents to act transparently and responsibly.
Frequently Asked Questions
What is the penalty imposed by Telangana RERA on the builder and real estate agent?
The Telangana Real Estate Regulatory Authority (RERA) has imposed a penalty of Rs. 8.57 lakh each on the builder and the real estate agent for unilaterally cancelling the allotments of homebuyers and violating the RERA Act, 2016.
What was the reason for the homebuyers' complaints?
The homebuyers filed complaints because the builder unilaterally cancelled their allotments and failed to register the sale agreements as promised, even after a delay of four years.
What does Section 11(5) of the RERA Act, 2016, state?
Section 11(5) of the RERA Act, 2016, mandates that a builder can only cancel an allotment in accordance with the terms of the agreement for sale. The builder in this case violated this provision by cancelling the allotments without valid grounds.
What was the interim order issued by the RERA?
The RERA issued an interim order directing the builder not to sell, transfer, or create any third-party interest in the flats until the complaints filed by the homebuyers were resolved.
How did the RERA determine the liability of the real estate agent?
The RERA found evidence suggesting that the real estate agent falsely represented themselves as the true owner and promoter of the project, leading to their recognition as the real estate agent and subsequent liability for violating the RERA Act, 2016.
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