MREAT Defines Housing Societies as Promoters in Redevelopment: Accountability Deepens Under RERA
Societies Pursuing Self-Redevelopment Must Register Projects and Uphold Buyer Rights, Rules Tribunal
In a landmark ruling with wide implications for Maharashtra’s booming self-redevelopment sector, the Maharashtra Real Estate Appellate Tribunal (MREAT) has held that a housing society undertaking redevelopment qualifies as a “promoter” under Section 2(zk) of the Real Estate (Regulation and Development) Act, 2016 (RERA) — making it jointly liable with the developer for obligations toward homebuyers.
The judgment, delivered on December 20, 2024, in M/s. New Sangeeta Co-operative Housing Society Ltd. vs. Mr. Kaushal M. Haria & Others, marks a turning point in the regulation of redevelopment projects across Maharashtra. It establishes that societies cannot escape promoter accountability, even after terminating a developer and taking charge of self-redevelopment.
Background of the Case
New Sangeeta Co-operative Housing Society Ltd., based in Mumbai, had entered into a redevelopment agreement with a private builder, permitting the sale of free-sale flats to third-party purchasers. After disputes over delays and alleged contract breaches, the society invoked arbitration and terminated the development agreement, choosing to pursue self-redevelopment.
However, several homebuyers who had booked flats in the project filed complaints before MahaRERA, claiming non-delivery and breach of agreement. The regulatory authority found the society liable alongside the developer and imposed penalties. The society challenged this before the appellate tribunal.
Tribunal’s Findings and Legal Reasoning
In its detailed order, the MREAT Bench upheld the MahaRERA decision, emphasizing that:
- Under Section 2(zk) of RERA, any person — including a landowner or housing society — who constructs or causes construction of flats for sale qualifies as a promoter.
- A society that owns land and authorizes development and sale, whether through a builder or by self-redevelopment, assumes promoter obligations under RERA.
- Termination of a developer’s contract in a registered project cannot be done unilaterally; societies must seek RERA’s permission before altering the project structure or continuing development independently.
- Buyers’ interests must be protected through fresh registration, revised agreements for sale, and statutory disclosures to maintain transparency.
The Tribunal clarified that RERA’s purpose is to safeguard allottees’ rights irrespective of the promoter’s identity — developer or society — ensuring that accountability follows control of the project.
Key Directions:
- The housing society must register the ongoing redevelopment project under RERA within 60 days.
- The society is jointly liable with the original developer for possession timelines, documentation, and penalties for delay.
- Future redevelopment societies must ensure compliance with Sections 3, 4, and 11 of RERA before advertising or selling flats.
Why This Matters
This ruling is expected to reshape how thousands of co-operative housing societies in Maharashtra handle redevelopment and self-redevelopment. It enforces legal parity between builders and societies, ensuring that flat purchasers receive the same protection, transparency, and grievance redressal regardless of who manages the project.
By recognizing societies as “institutional promoters,” MREAT has fortified consumer protection and brought self-redevelopment projects under full RERA scrutiny, bridging a key regulatory gap in Mumbai’s housing sector.
