MREAT Declares Housing Society a ‘Promoter’, Imposes Joint Liability in Chembur Self-Redevelopment Case
Tribunal Says Societies Cannot Evade RERA Duties After Terminating Developers
In a decisive ruling for Mumbai’s redevelopment landscape, the Maharashtra Real Estate Appellate Tribunal (MREAT) on December 20, 2024 held that New Sangeeta Co-operative Housing Society Ltd. in Chembur is a co-promoter under the Real Estate (Regulation and Development) Act (RERA), making it jointly liable for obligations owed to homebuyers after terminating its original developer.
The society had ended its 2018 redevelopment agreement in 2023 with 82% approval, citing delays, a ₹1.6-crore corpus deficit, and a C-1 structural audit warning of seismic risks. It subsequently opted for self-redevelopment, but allottees from the now-terminated developer complained to MahaRERA that the society failed to register the project and refused transit accommodation.
MREAT dismissed the society’s appeal, noting that Section 2(zk) of RERA includes landowners authorising construction within the definition of “promoter”. The tribunal said that once the society entered a developer-led agreement involving 2.2 FSI and authorised sale of additional flats, it assumed co-promoter responsibilities—termination cannot extinguish prior or continuing duties.
The ruling reinforces that in hybrid transitions from developer-led to self-redevelopment, societies must:
- Register the project under RERA
- Provide buyer compensation and transit rent
- Maintain quarterly updates on self-redevelopment progress
- Secure purchaser consents before issuing new tenders
MREAT further emphasised MahaRERA’s jurisdiction to regulate transitions, ordering ₹80 lakh in buyer compensation, ₹20,000 monthly transit entitlements, and a ₹5-lakh penalty for non-registration. It also directed forensic audits of past sales and barred new tenders without 55% purchaser approval.
The Tribunal’s verdict is expected to influence 900+ ongoing redevelopment cases in Mumbai, signalling that societies cannot avoid RERA liabilities when stepping into the promoter’s role during self-redevelopment.
