Telangana RERA Permits Association Of Homebuyers To Take Over Project Due To Builder's Failure

Section 8 allows the Authority to take necessary actions if a project's registration lapses or is revoked.

Background Fact

Homebuyers (Complainants) purchased their respective flats in the builder's (Respondent) project named Jaya Platinum located in Medchal-Malkajgiri District, Hyderabad. The total number of flats in the project were 60.

Homebuyers mentioned that there has been no progress in the project since June 2022. The project is approximately 50% complete with only the skeleton structure, brickwork and internal and external plastering done.

Homebuyers further stated that the builder has not made any progress in the construction of the project and has provided different completion and possession dates to the homebuyers ranging from June 2022 to June 2023. This delay has caused significant hardships to the homebuyers and their families.

Being Aggrieved, the homebuyers filed a complaint before the authority seeking possession and a direction to hand over the project to the association of homebuyers under Section 8 of RERA, 2016.

Observation and Direction by Authority

The authority referred the assessment report submitted by the independent agency on the status of construction in the Project. The report revealed that the project was only 66% complete with 34% of the work still pending. Despite this progress the construction had stopped since June 2022. The report estimated that the remaining work could be completed within 12 months with uninterrupted funding.

Authority referred Section 8 of the Real Estate (Regulation & Development) Act, 2016 Which read as follows:

Section 8: Obligation of Authority consequent upon lapse of or on revocation of registration.

Upon lapse of the registration or on revocation of the registration under this Act, the Authority, may consult the appropriate Government to take such action as it may deem fit including the carrying out of the remaining development works by competent authority or by the association of allottees or in any other manner, as may be determined by the Authority:

Provided that no direction, decision or order of the Authority under this section shall take effect until the expiry of the period of appeal provided under the provisions of this Act:

Provided further that in case of revocation of registration of a project under this Act, the association of allottees shall have the first right of refusal for carrying out of the remaining development works.

Authority Invoked Section 8, observing that the builder had deliberately failed to complete the construction of the project. As a result, the Authority revoked the project's registration, declared the builder a defaulter and recognized that the Association of Homebuyers should take over the completion of the project.

Accordingly, the Authority permitted the Association of Homebuyers, under Section 8, to take over the project and complete it within 8 months, with an additional 6-month grace period.

Case – Abhishek Singh Versus M/s Jayathri Infrastructures India Pvt Ltd.– “Jaya Platinum Project” Along with 12 Others

Citation - Complaint No.1269 of 2023 Along with 12 Others

Date – 2 December

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