Legal victory for homebuyers as Assam REAT rules against builder's use of civil suits to avoid RERA registration

Assam Real Estate Appellate Tribunal (REAT) made a significant ruling last week, stating that the mere pendency of civil suits cannot be used as a legal justification to prevent the registration of real estate projects. This ruling came as a result of an appeal filed by a builder against a judgement delivered by the Real Estate Regulatory Authority (RERA), Assam.

In the case at hand, the builder had faced penalties imposed by RERA for failing to register a project comprising 252 flats, as required by Sub-Section (1) of Section 3 of the Real Estate (Regulation and Development) Act, 2016. This Act mandates that before advertising, marketing, booking, selling, or offering any plot, apartment, or building in a real estate project, the builder must register the project with RERA.

The builder's construction activities had commenced on 03.04.2018, and it came to light that despite the lack of registration, as many as 106 individuals had already invested substantial amounts, totalling Rs. 14 crores, in advance for the proposed 252 flats. Such non-compliance with the statutory provisions constituted a violation of Subsection (1) of Section 3 of the aforementioned Act.

During the appeal, the builder argued that the project was embroiled in various civil suits with landowners since 2018, rendering its fate uncertain. However, the Tribunal swiftly dismissed this argument, deeming it irrelevant and misconceived. The Tribunal emphasized that the mere existence of civil suits should not act as a legal barrier to fulfilling the statutory requirements laid down in Section 3 of the Act.

As a consequence of the ruling, the Assam REAT not only rejected the appeal but also directed the builder to deposit the entire penalty amount with the Assam RERA within a stipulated period of three weeks.The momentous decision was rendered by Justice (Retd.) Manojit Bhuyan, Chairperson, and Onkar Kedia, Member, Assam REAT.

This landmark ruling sets a precedent for other real estate developers, reaffirming the significance of complying with the legal obligations outlined in the Real Estate (Regulation and Development) Act, 2016. It serves as a warning to the real estate industry, emphasizing the importance of adhering to registration requirements before marketing or selling any real estate projects to the public.

Next (Elaborate real estate scam unravelled in Ahmedabad as broker alleges fraud of 35 crore)

Legal victory for homebuyers as Assam REAT rules against builder's use of civil suits to avoid RERA registration

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