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The Maharashtra Real Estate Regulatory Authority (MahaRERA) has granted Honest Shelters Pvt Ltd, the developer of the Palais Royale tower in Worli, Mumbai, a one-year extension for project completion. Despite concerns raised during hearings, MahaRERA chairperson Ajoy Mehta emphasized the Act's purpose to promote the real estate sector transparently and protect consumer interests.
In its December 28 order, MahaRERA highlighted that the developer initially committed to completing the project by December 31, 2021, but had already received three extensions, considering the challenges posed by the Covid-19 pandemic. The new extension aims to accommodate completion efforts, ensuring the project doesn't face further disruptions. The extension, under Section 7(3) of RERA, is issued as the developer is facing delays due to pending litigations.
Mehta noted the developer's failure to secure the required two-thirds majority consent from homebuyers for the extension, as mandated by RERA provisions. Additionally, he observed the absence of updated Quarterly Progress Reports (QPRs), detailing bookings, sales, and fund collections during the quarter. Despite these concerns, Mehta stressed the importance of allowing the extension to prevent project stalling, which could harm consumer interests. He underscored that the granted extension, being the first under Section 7(3), is crucial for project completion.
The order imposed conditions on Honest Shelters Pvt Ltd, mandating the completion of remaining construction work and obtaining an Occupancy Certificate (OC) by December 30, 2024. Additionally, the developer was directed to update QPRs by January 31, 2024, submit bar charts within 15 days outlining project milestones, and provide monthly progress reports to MahaRERA and homebuyers.
Palais Royale, initially promoted by Shreeram Urban Infrastructure Ltd, is among India's tallest buildings. Its construction began in 2008. Legal hurdles, including a PIL by NGO Janhit Manch citing building violations, led to project delays. The Supreme Court's October 2019 clearance dismissed the NGO's appeal, allowing completion. However, by then the project faced financial challenges as the promoter defaulted on Rs 900-crore loans from Indiabulls Housing Finance Ltd in 2010, leading to the project's auction.
The Pune-based Honest Shelters Pvt Ltd purchased the project for Rs 705 crore. MahaRERA's website details the building with 76 sanctioned floors and 162 apartments, of which 77 are already booked. Most of the bookings are by prominent individuals, including doctors, fund managers, stockbrokers, and NRIs, waiting for their homes since 2010. Each apartment, ranging from 4,000 to 8,000 sq ft, commands an average price of Rs 50 crore. While initially rated the tallest in Mumbai by the Council for Tall Buildings and Urban Habitat at 300 m, Palais Royale was later surpassed by Lokhandwala Minerva, certified as the tallest completed building at 300.6 m.
In conclusion, MahaRERA's extension decision for Palais Royale reflects the delicate balance between protecting consumer interests and promoting efficient functioning of the real estate sector. The conditions imposed aim to ensure project completion, with transparency and accountability underscored in the context of RERA regulations. The history of legal challenges, financial hurdles, and the subsequent acquisition by Palais Royale adds complexity to the narrative, making the extension a critical step towards delivering homes to long-awaiting buyers.
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