MREAT Upholds Society’s Right To Terminate Developer, Clears Path For Self-Redevelopment
Tribunal Strengthens Resident Autonomy And RERA Accountability In Borivali Redevelopment Dispute
The Maharashtra Real Estate Appellate Tribunal (MREAT) has delivered a landmark ruling reinforcing the rights of housing societies to terminate defaulting developers and undertake self-redevelopment after deemed conveyance. The order, passed on October 20, 2025, in Vishal Co-operative Housing Society Ltd. vs. M/s. Pinnacle Realty & Ors. overturns a prior MahaRERA decision that had rejected the society’s termination plea.
The Case: Defaults And Delays
The Vishal Co-operative Housing Society, a 50-year-old building in Borivali, Mumbai, obtained deemed conveyance in 2023 under Section 11 of MOFA after nearly two decades of promoter inaction. In 2024, with 76% member consent, the society signed a RERA-registered redevelopment agreement with M/s. Pinnacle Realty, promising new homes, a ₹3 crore corpus, and project completion within 30 months.
By September 2025, progress stood at just 12%, with the developer defaulting on ₹75 lakh in rent payments and failing to maintain mandatory escrow accounts under RERA Section 4(2)(l)(D). The society voted with 74% approval to terminate the agreement and switch to self-redevelopment through a ₹15 crore bank loan.
MahaRERA, however, rejected the termination, arguing that the default was not “willful” and could disrupt the project’s 200+ allottees. The society appealed to MREAT, asserting that post-conveyance, the majority’s right to self-redevelopment overrides developer retention when contractual breaches are proven.
Tribunal’s Findings
MREAT allowed the appeal, declaring that once deemed conveyance is executed, the society gains absolute ownership rights and may invoke RERA Section 7(1)(c) to terminate developers for material breach.
Citing Neelkamal Realtors Suburban Pvt. Ltd. vs. RERA (2024) and Shiv Shakti Co-operative Housing Society (2025), the tribunal observed that the developer’s 12% progress, rent arrears, and escrow non-compliance constituted serious violations, defeating any force majeure defense. The tribunal dismissed concerns about the society’s expertise, noting its RERA registration, project consultant appointment, and adherence to 2019 Maharashtra Self-Redevelopment Guidelines.
It also criticized MahaRERA for prioritizing project continuity over resident safety in an aging structure, noting that “statutory autonomy under MOFA and RERA must prevail over administrative caution when safety and accountability intersect.”
Orders
- MahaRERA’s rejection set aside; termination of the developer upheld.
- Developer to refund ₹2 crore escrow shortfall and ₹75 lakh rent arrears within 60 days, with 10.5% interest for delay.
- Society authorized to register self-redevelopment within 45 days under RERA, with quarterly audits by an independent consultant.
- ₹1 lakh costs imposed on the developer, payable to the society.
Why It Matters
This judgment further strengthens society-driven redevelopment after deemed conveyance, offering clarity on termination thresholds and developer accountability. By emphasizing transparent escrow compliance and rejecting weak force majeure claims, MREAT ensures financial discipline in redevelopment contracts.
Experts say the verdict will influence over 10,000 societies across Mumbai and Maharashtra, empowering them to pursue self-redevelopment and reducing dependence on default-prone builders.
