Can real estate investors without registered sale agreements seek RERA relief for delayed possession?

“It is observed that none of the complainants, except the complainant at sr. no. 3, have placed on record the allotment letters issued by the respondent. In the absence of allotment letters, the foundational document evidencing allotment of a specific apartment, consideration, and contractual obligations between the parties is missing, which materially affects the maintainability and adjudication of the complaints,” the order stated.

It also observed that the complainants had placed on record an ‘Investment Document’ that described them as “investors” and not as purchasers/allottees seeking a residential unit.

“This aspect assumes significance while examining the applicability of section 18 of the Act, which contemplates delay in possession “in terms of the agreement for sale,” the Authority noted.

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The 11 individuals had paid over ₹3.70 crore to the developer between 2016 and 2018, of which 10 individuals had entered into an investment document, and one individual had received an allotment letter.

They submitted that the developer failed to execute and register agreements for sale with them, in clear violation of section 13 of the RERA Act, 2016, while continuing to raise further monetary demands, the RERA order noted.

The individuals submitted that there has been “negligible and sporadic construction” activity at the site over several years, with only a few slabs completed, and no commensurate progress to justify the prolonged delay in completion and possession.

They alleged that the developer had unilaterally altered material terms, including possession timelines and, in certain cases, flat numbers, floor levels, carpet areas, and consideration amounts, without the complainants’ consent and without execution of registered agreements, the order noted.

According to the individuals, the developer had attempted to justify the delay by citing alleged injunctions, litigation, financial constraints, and COVID-19 disruptions; however, no valid injunction restraining construction has been demonstrated, and in many cases, the delay occurred before March 2020, it said.

They alleged that the original project completion date disclosed under MahaRERA was December 2021, which had been unilaterally extended to December 2027, evidencing an inordinate delay of more than six years with no certainty of completion even by the extended date, the order noted.

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The developer said that many of the complainants have expressly acknowledged themselves as “investors” under the investment documents, and in the absence of a duly executed and registered agreement for sale specifying a possession date, the essential precondition for invoking section 18 of the RERA Act, namely, delay in possession “in terms of the agreement for sale,” is not satisfied, as per the order.

According to the developer, the complainants have defaulted in payment of lawful and stage-wise demands, “failed to pay applicable taxes, stamp duty, and registration charges, and, despite repeated reminders, did not come forward to register the agreements for sale due to their own financial constraints, inability to arrange funds, or failure to secure loan approvals,” the order noted.

The developer contended that construction of the project was stalled due to factors beyond its control, including the pendency of a suit filed by a neighbouring society, which led the court to issue an injunction halting construction until it was vacated in November 2021.

The project was severely impacted by the COVID-19 pandemic, nationwide lockdowns, labour shortages, supply chain disruptions, and a steep escalation in construction material costs, all of which constitute force majeure events under section 6 of the RERA Act, the developer said as per the order.

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The MahaRERA, in its order, also noted that none of the investment documents placed on record by the complainants has been signed by them, except for two complainants.

“In the absence of signatures, the evidentiary value, authenticity, and enforceability of such documents remain doubtful, and the same cannot be relied upon to conclusively establish contractual obligations or reciprocal rights under the Act,” the order said.

The Authority further observed that no duly executed and registered agreements for sale, as contemplated under section 13 of the Act, have been entered into by both parties. “In the absence of an agreement for sale specifying a definite date of possession, the essential condition for invoking section 18 of the Act, namely delay in handing over possession “in accordance with the terms of the agreement for sale,” is not satisfied,” the order said.

The MahaRERA concluded that the Authority holds that the present complaints are not maintainable under the Act and do not warrant adjudication on merits, the order added.