MahaRERA: Possession Without Interest is Not Full Relief

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has clarified an important aspect concerning conciliation proceedings under the Real Estate (Regulation and Development) Act 2016 (RERA Act 2016). The Authority observed that an agreement reached through conciliation that solely grants possession to an allottee does not extinguish their right to claim interest for delayed possession under RERA Act 2016 §18.

Background of the Ruling

The ruling arose from a situation where homebuyers, after receiving possession of their units, filed a complaint with MahaRERA seeking compensation in the form of interest for the period of delay. The developer contended that the homebuyers had previously entered into a conciliation agreement, wherein they had accepted possession without reserving their right to claim interest. The developer argued that this agreement barred any further claims for delayed interest.

MahaRERA's Stance on Conciliation Agreements

MahaRERA, after reviewing the arguments and the relevant provisions of the RERA Act 2016, rejected the developer’s contention. The Authority highlighted that the primary objective of RERA Act 2016 §18 is to safeguard the interests of homebuyers by ensuring timely delivery of projects or compensation for delays. While conciliation is encouraged, any agreement reached must adhere to the spirit and letter of the law.

Key takeaways from the MahaRERA order:

• Right to Interest: The right to claim interest for delayed possession is an independent statutory right conferred upon homebuyers under RERA Act 2016 §18. It is not automatically waived merely by accepting possession.
• Scope of Conciliation: If a conciliation agreement focuses solely on the delivery of possession and does not explicitly address or expressly waive the right to seek delayed interest, such a right remains available to the allottee.
• Full Relief: MahaRERA emphasised that conciliation should aim for a comprehensive resolution. If a conciliation order offers only partial relief, such as possession, without addressing other statutory entitlements like delayed interest, the allottee is not precluded from pursuing the remaining unaddressed claims.

Implications for Developers and Homebuyers

This ruling establishes a significant precedent for both developers and homebuyers in Maharashtra. Developers engaging in conciliation will need to ensure that any settlement explicitly covers all aspects of potential claims, including delayed interest, to avoid subsequent litigation. For homebuyers, it reinforces their statutory right to interest for delayed projects, even after taking possession, provided their conciliation agreement did not explicitly extinguish this right.