MahaRERA Rules Five-Year Defect Liability Commences from Date of Possession, Not Occupancy Certificate

Possession Handover Triggers Statutory Warranty

In a notable clarification regarding promoter obligations, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has ruled that the statutory five-year defect liability period begins from the date actual possession of a real estate unit is handed over to the allottee, rather than the date on which the competent authority issues the Occupancy Certificate (OC).

The ruling addresses a recurring defence raised by developers seeking to calculate the defect liability timeline from the date of securing municipal completion documents or the OC. MahaRERA maintained that an allottee cannot be expected to identify or report structural or workmanship defects before receiving physical possession and lawful access to the property.

Statutory Framework: Section 14(3) of RERA Act, 2016

Under Section 14(3) of the Real Estate (Regulation and Development) Act, 2016, promoters are legally bound to rectify structural defects or defects arising from substandard workmanship, quality, or service provision:

• Rectification Period: If an allottee brings any defect to the promoter's notice within five years from the date of handing over possession, the promoter is obligated to rectify it without additional charge.
• Timeframe: The promoter must remedy the reported defect within 30 days of receipt of the grievance.
• Compensation: If the developer fails to rectify the defect within the prescribed period, the aggrieved homebuyer is entitled to appropriate compensation under the Act.

Practical Implications for Allottees and Promoters

This interpretation prevents promoters from consuming or running down the statutory warranty period during procedural intervals—such as delays between securing the Occupancy Certificate and executing physical handover to purchasers.

• For Developers: Securing an OC does not extinguish or commence the five-year clock for individual units. The countdown begins separately for each unit upon the formal execution of possession, requiring accurate record-keeping of possession letters and handover protocols.
• For Allottees: Homebuyers retain the statutory right to demand remediation of construction flaws, seepage, or structural damage for a full five years after moving in, strengthening consumer safeguards against premature disclaimers of liability by builders.