Minority rehab members can approach MahaRERA seeking action against a defaulting builder, as Section 7 of RERA permits complaints without requiring support from a majority of allottees. MahaRERA can issue a show-cause notice and revoke project registration if violations are established.

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We are a group of 12 members of a Borivali society with 40 members. The society executed a development agreement with a developer in May 2018, who promised possession of flats within 36 months of the IOD. Accordingly, possession was due by April 2022.

However, the builder has completed about 75% of the work and stopped further construction for want of funds. He has obtained two extensions from MahaRERA and stopped paying rent to members for more than a year. The managing committee and some members believe that terminating the builder will lead to litigation and deter another builder from completing the project.

Can we, the 12 members, approach MahaRERA for removal of this builder? Since we are minority rehab members, will our complaint be entertained by MahaRERA?

Sadashiv Vichare & others, Borivali (West)

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The key question is whether minority rehab members can approach MahaRERA for removal of the builder.

Section 7 of RERA empowers MahaRERA to revoke a project’s registration upon receiving a complaint or even suo motu. Section 7(1) reads: “The authority may, on receipt of a complaint or suo motu or on the recommendation of the competent authority, revoke the registration, after being satisfied that (a) the promoter makes default in doing anything required under this Act; (b) the promoter violates competent authority's terms and conditions; (c) the promoter is involved in any kind of unfair practice.”

Significantly, Section 7(1) says “on receipt of complaint or suo motu”; it does not specify who may complain. Section 7(1) also does not require a complaint from a majority of allottees or homebuyers.

While filing a complaint, produce evidence showing that (a) the builder defaulted in complying with the RERA Act requirements; (b) he violated the approval terms or conditions of the competent authority; or (c) the promoter engaged in unfair practices.

On receiving a complaint, MahaRERA must issue a show-cause notice to the builder, asking why the registration should not be revoked. The builder gets 30 days to explain. If MahaRERA finds him capable, it may impose strict terms. If MahaRERA finds the builder incapable or unwilling, it may revoke the registration.

Once the registration is revoked, Section 8 of RERA applies. MahaRERA may allow the association of allottees, comprising society members and homebuyers, to complete the project or permit the appointment of another developer.

Unless the project is financially feasible, no builder will accept it. Therefore, members must raise the balance funds and engage a contractor. They retain their legal rights to claim rent arrears and compensation from the defaulting builder.

(Advocate Shirish V Deshpande is chairman, Mumbai Grahak Panchayat. Queries can be sent to him on email: shirish50@yahoo.com)

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