MahaRERA Ruling Empowers Housing Society To Seek Self-Redevelopment After Builder Default

Tribunal Cites Escrow Violations, Orders ₹4 Lakh Penalty On Developer For Delayed Redevelopment

Mumbai, September 15, 2025 — In a landmark decision, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has ruled in favor of Swastik Co-operative Housing Society Ltd., Navi Mumbai, in its complaint against M/s. Elite Constructions, holding the developer accountable for serious breaches under the Real Estate (Regulation and Development) Act, 2016 (RERA).

The dispute stemmed from a redevelopment agreement signed in 2019, under which Elite Constructions was to complete a new residential project by June 2023. The project, duly registered with RERA, involved rehabilitating society members and creating new saleable flats. However, the builder failed to meet deadlines, neglected quarterly progress reports, and did not maintain the mandatory 70% project escrow account.

The society approached MahaRERA, alleging violations of Sections 4, 11, and 14 of RERA — focusing on project delays, lack of transparency, and non-compliance with financial safeguards.

Tribunal’s Key Findings

MahaRERA held that the developer violated Section 4 (project timeline adherence) and Section 11 (promoter’s duty to maintain accounts and updates), resulting in prolonged hardship for residents forced into temporary accommodation.

The order highlighted that Elite Constructions’ failure to deposit 70% of the proceeds in the escrow account under Section 4(2)(l)(D) represented a serious breach of financial discipline and accountability. Citing precedent in MahaRERA vs. Dosti Realty Ltd. (2024), the tribunal reaffirmed that housing societies are entitled to terminate agreements and pursue self-redevelopment when a developer defaults.

Orders Issued

Developer to complete construction within 9 months (by June 15, 2026) under strict MahaRERA supervision.
₹4 lakh penalty imposed on the developer, payable to the society as compensation.
If delays persist, the society may terminate the agreement and undertake self-redevelopment with MahaRERA’s approval.
Developer must transfer all project records and escrow funds to the society within 45 days.

Broader Significance

The verdict strengthens MahaRERA’s evolving stance on redevelopment accountability and society empowerment. It signals to developers that financial compliance and timely delivery are non-negotiable under RERA. It also paves the way for more societies across Maharashtra to opt for self-redevelopment — a model increasingly viewed as a safeguard against builder defaults.

This order not only reinforces transparency in real estate financing but also sets a precedent for cooperative societies seeking autonomy in rebuilding their homes when trust in private developers collapses.