Nine Plots on 620 sq m: The Exemption That Wasn't
Ritu, a registered agent, lists 'Green Meadows' on a property portal. It is a plotted layout of nine plots carved out of 620 sq m at Wada, Palghar. The promoter, a local landowner, has not registered the project; he tells Ritu that 'anything under 500 sq m or eight flats is exempt, and anyway a plot layout is not a building'. Ritu runs six advertisements over two months, shows the layout to eleven prospects and brings four bookings, each backed by a ₹3 lakh token paid directly to the promoter. One buyer checks the MahaRERA portal, finds no such project, and complains to MahaRERA naming both men. Ritu's defence: she acted in good faith on the promoter's assurance, and her own agent registration was valid throughout.
1. Was registration of the project mandatory? Address the promoter's two arguments.
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Yes, registration was mandatory.
First argument - 'a plot layout is not a building' - fails at the threshold. Development of land into plots is expressly within the definition of a real estate project (Section 2(zh)), which covers layout of plots together with common areas and amenities. Section 3(1) then bars advertising, marketing, booking or accepting money without registration.
Second argument - the small-project relief in Section 3(2)(a) - is threshold-based: land not exceeding 500 sq m, or not more than eight apartments. Green Meadows fails both limbs, at 620 sq m with nine plots. The section does not allow a promoter to add the two figures or pick the friendlier one, and a device such as carving the ninth plot into a 'road' or 'amenity' to reach eight will be looked through on the sanctioned layout.
The project therefore needed registration with the sanctioned layout, title documents and the promoter's declarations, and every advertisement needed to carry the registration number. None existed.
2. What is Ritu's personal exposure, and what mitigation actually counts?
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Ritu cannot hide behind the promoter's assurance.
Section 10 forbids an agent from facilitating the sale or purchase of any plot or apartment in a project that is not registered, and from facilitating any transaction in contravention of the Act. The duty is independent and personal: a buyer checking the portal expects the agent to have checked it first.
Exposure:
- Penalty under Section 62 before the adjudicating officer - ₹10,000 per day of continuing default or 5% of the cost of the plot involved, whichever is less, after a hearing under Section 71.
- The six advertisements breached the requirement that every advertisement carry the project's registration number.
- Her own valid registration is irrelevant to this charge; it only means she is proceeded against as a registered agent rather than for practising unregistered.
- MahaRERA may separately move to cancel her registration, after notice, for breach of the conditions of registration.
Mitigation that counts: pull the advertisements and the listing immediately, put the correction in writing, produce her portal verification records, and actively assist the four buyers with refunds. 'He told me it was exempt' is a lesson, not a defence.
3. What happens to the four ₹3 lakh tokens, and how should the complaint be framed?
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₹12 lakh sits with the promoter. Because the project was never registered, the buyers cannot be told to wait for a registered allotment; a Section 31 complaint is maintainable, and MahaRERA can direct refund with interest. The promoter additionally faces the penalty scheme for carrying on an unregistered project, which can extend to a substantial percentage of the estimated project cost, and the possibility of prosecution for persistent defiance.
Ritu's exposure on the money is restitutionary: any commission taken on the four bookings should be returned, and should not be netted against her own losses.
Framing: a single Section 31 complaint by all four buyers against promoter and agent together, seeking (i) refund of ₹3 lakh each with interest, (ii) a direction to stop marketing the layout, and (iii) reference of the penalty question against Ritu to the adjudicating officer under Section 71. Advise the buyers in writing about the promoter's identity and the complaint route. A 'token' receipt from an unregistered promoter creates no protected allotment - it is only evidence of payment.