Borivali Developer Faces ₹5 Lakh MahaRERA Penalty for Selling Flat Without Valid Construction Approval

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has reportedly imposed a penalty of ₹5 lakh on a developer for selling a flat on the 10th floor of a redevelopment project in Borivali without possessing the mandatory registration for floors above the seventh level. The regulatory order was passed after a homebuyer, who had paid ₹55 lakh for the unit, failed to receive possession of the property.

Case Background and Key Details

According to sources, the case involves Ssakash Developers and a buyer named Mohit Rathod, who entered into an agreement for a flat valued at ₹1.1 crore in the Borivali redevelopment project. The buyer had reportedly paid ₹55 lakh in 2021 towards the purchase of the 10th-floor unit. However, it was later discovered that the developer possessed a commencement certificate only up to the 7th floor at the time of the sale.

MahaRERA's Observations and Regulatory Findings

The regulatory authority reportedly observed that the developer had violated Section 3 of the RERA Act, which prohibits the sale of flats without proper registration and approvals. Despite the commencement certificate allowing construction only up to the 7th floor, a flat on the 10th floor was allegedly sold and registered.

MahaRERA stated that the promoter had knowingly accepted payment for a flat that could not legally be constructed, which constitutes a contravention of both RERA and the Maharashtra Ownership Flats Act (MOFA). Additionally, under Section 11 of the RERA Act, the promoter was expected to disclose sold and unsold inventory in the prescribed format, which was reportedly not done. Such violations are precisely why regulatory bodies continue to freeze real estate project accounts to protect homebuyers.

Legal Timeline of the Dispute

Buyer's Position and Developer's Response

The buyer had reportedly sought possession of the flat along with interest for the delay. However, the developer offered to refund only the principal amount, citing inability to complete the flat due to the court's construction ban. MahaRERA acknowledged that while the buyer was aware of the missing commencement certificate, they still proceeded with the payment and agreement. Homebuyers must understand why occupancy certificates are vital when buying property to avoid such situations.

Implications for the Real Estate Sector

This case underscores MahaRERA's strict stance on unauthorised sales and non-compliance with statutory approvals. The penalty reinforces the principle that no flat can be sold beyond the approved construction level, regardless of any contractual arrangements between parties.

The regulatory authority also reiterated the importance of transparent inventory disclosure and compliance with planning authority permissions, cautioning developers against bypassing legal procedures at the cost of consumer protection. This ruling aligns with the regulator's recent efforts where 212 Maharashtra housing projects were flagged for regulatory breaches.

Lessons for Homebuyers and Developers

The ruling serves as a critical reminder for homebuyers to verify RERA registration and commencement certificates before making any payments. It is advisable to thoroughly understand homebuyer rights and developer obligations under RERA before entering into any property transaction.

For developers, the ruling signals a zero-tolerance approach towards illegal project marketing and sale of non-sanctioned units. Those planning to invest in Mumbai's booming redevelopment market must ensure complete regulatory compliance to avoid such penalties and legal complications.

Prospective buyers should also be aware of RERA loopholes every homebuyer must know before investing in any property to safeguard their interests.

Disclaimer: This article is intended for informational purposes only and should not be construed as legal or investment advice. Readers are advised to verify all facts independently and consult qualified professionals before making any real estate decisions. Ghar.tv does not guarantee the accuracy or completeness of the information presented herein.