Tribunal restores Turf View’s residential registration after finding that invalid buyer consent was used to support a proposed commercial redevelopment
Mumbai: The Maharashtra Real Estate Appellate Tribunal has overturned an earlier MahaRERA order that allowed the deregistration of the Orchid Turf View housing project, restoring its original residential registration.
The ruling is a setback to plans by Prestige Group and DB Realty to develop the site for commercial use. The Tribunal also imposed a penalty equivalent to 2% of the project cost on the DB Realty-linked promoters of Turf Estate Joint Venture LLP for misleading the regulator when it came to seeking approval for changes to the project.
Turf View Project had 27 Allottees
The project was originally registered as DB Turf View under Section 5 of the Real Estate (Regulation and Development) Act, or RERA. It had 27 allottees.
The promoters then sought a change in promoter under Section 15 of the Act and proposed to change the land use from residential to commercial.
To support the proposed changes, the promoters claimed to have obtained consent from at least two-thirds of the allottees, which is the threshold under the RERA framework for certain changes to a registered project.
However, five of the 27 allottees had not consented to the proposed changes.
Tribunal Questions validity of Buyer Consent
A key issue before the Tribunal was whether the consent relied upon by the promoters could legally be counted towards the required two-thirds threshold.
The Tribunal found that some of the consent came from buyers who had already received refunds and had exited the project. It held that such buyers could not lawfully be treated as allottees for the purpose of establishing the necessary consent.
The Tribunal also held that the cancellations of allotments carried out as part of the process were illegal and unenforceable.
MahaRERA Deregistration Order Set Aside
MahaRERA had allowed the promoter change and subsequent deregistration of the project in 2022. The Tribunal, however, noted that the RERA Act does not have an explicit provision for such deregistration of a registered project.
Accordingly, the Tribunal quashed the earlier deregistration order and restored the project's original residential registration.
Promoters directed to execute sale agreements
The Tribunal has also directed the promoters to execute registered sale agreements with the affected buyers within one month.
Importantly, the project now needs to proceed according to its original sanctioned residential plans and not the commercial redevelopment plan of the Prestige-DB Realty project.
Setback For Prestige-DB Realty Redevelopment Plans
The ruling is a major setback to the commercial redevelopment plans for Prestige Group and DB Realty on the Turf View site.
In addition to the immediate problem, the decision would also reinforce the importance of obtaining consent from allottees prior to making any fundamental changes to a real estate project.
The case illustrates the buyer-protection principles inherent in the RERA framework and shows that promoters cannot rely on consent from individuals who no longer qualify as allottees to meet statutory thresholds for major project changes.
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