Pune-based housing project penalized for omitting MahaRERA registration number in advertisement

A housing project located in Pune has been penalized by the Maharashtra Real Estate Regulatory Authority (MahaRERA) for omitting the registration number of the project in their advertisement. The promoter of the project, Raichandani Constructions & Developers, has been fined Rs. 50,000/- for the violation of section 11(2) of the Real Estate Regulation Act (RERA).

background of the case

In 2016, the Maharashtra government established the Maharashtra Real Estate Regulatory Authority (MahaRERA) to regulate the state's real estate sector and protect homebuyers' interests. All ongoing and new real estate projects with more than eight apartments or 500 sq m of land must be registered with MahaRERA, and all advertisements for these projects must contain the project's MahaRERA registration number.

The case in question is related to a housing project in Pune, Maharashtra, that did not comply with MahaRERA's advertising guidelines. The project was advertised without displaying the MahaRERA registration number, and it was found that the project had not been registered with MahaRERA at all. This omission led to the project being penalized by MahaRERA. The penalty amount was decided based on the project's total cost, and it was significant enough to grab the attention of the media and the real estate industry. The case serves as a reminder to all real estate developers and promoters to adhere to MahaRERA guidelines to avoid penalties and legal consequences.

Introduction to the Penalty Imposed by MahaRERA

The MahaRERA Authority, Mumbai, on its own motion, had issued a show-cause notice to Raichandani Constructions & Developers on March 28, 2023, for publishing an advertisement in the Maharashtra Times newspaper without mentioning the MahaRERA project registration number. The housing project "Suman Co-Operative Housing Society Limited," bearing MahaRERA registration no. P52100049422, situated in Pune, had issued the advertisement on March 22, 2023.

In its reply to the show-cause notice, the promoter of the project had submitted that it was the first newspaper advertisement and inadvertently issued the advertisement without mentioning the MahaRERA registration number. However, during the hearing scheduled on April 17, 2023, through video conferencing as per the MahaRERA Circular No. 27/2020 and MahaRERA Order No. 593/2023, the promoter remained absent.

The Obligation of Promoters under RERA

The Real Estate Regulation Act (RERA) was enacted by the Indian government in 2016 to regulate the real estate sector and protect the interests of homebuyers. The Act mandates that every promoter of a real estate project must register the project with the respective state's RERA authority before advertising, marketing, or selling the project.

Section 11(2) of the RERA Act mandates that the advertisement or prospectus issued or published by the promoter shall mention prominently the website address of the Authority wherein all details of the registered project have been entered and include the registration number obtained from the Authority and such other matters incidental thereto.

In the present case, Raichandani Constructions & Developers had published a quarter-sized advertisement in the Maharashtra Times newspaper on March 22, 2023. The promoter had failed to publish the MahaRERA registration number of the project, in violation of section 11(2) of RERA.

Penalty Imposed on Raichandani Constructions & Developers

In view of the violation of section 11(2) of RERA, MahaRERA has imposed a penalty of Rs. 50,000/- on Raichandani Constructions & Developers. The promoter has been directed to pay the said penalty within a period of 15 days from the date of the order. If the promoter fails to comply, a further penalty of Rs. 1,000/- per day would be imposed until compliance.

The Technical and Finance Department of the MahaRERA authority shall verify the payment of the said penalty before processing any applications viz. extension, correction, change of name, etc., with respect to the said project.

In conclusion, the recent penalty imposed on the Pune-based housing project for omitting its MahaRERA registration number in its advertisement serves as a reminder of the importance of complying with real estate regulations. Non-compliance not only leads to penalties but also undermines the trust of homebuyers and affects the reputation of the builder. Therefore, it is imperative that developers ensure that all their projects are registered with the appropriate regulatory authorities and adhere to all the necessary guidelines and procedures to safeguard the interests of homebuyers and maintain the integrity of the real estate sector.

Note: The information provided in this article about Maharashtra Real Estate Regulatory Authority (MahaRERA) is for informational purposes only. It is not intended as legal or professional advice and readers should consult qualified professionals for advice specific to their circumstances.

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