With increasing complaints that the builders illegally allotting the same flat to multiple buyers, the Maharashtra Real Estate Regulatory Authority (MahaRera) has now directed them to publicly disclose sold or booked apartments or flats.
“To avoid multiple transactions of flats/plots, it is necessary to provide the information as soon as sale is concluded or booking is made,” it said, adding builders would also be required to specify if the flat was mortgaged.
Real estate market experts said there are cases where builders issue only a letter of allotment to the buyer; a sort of confirmation that the flat is booked. “The flat can be sold again to any other allottee without the first allottee knowing. The same flat may be even mortgaged to financial institutions. In that case neither the first nor the second allottee is aware of the flat being sold nor is the financial institution aware of the sale,” said a leading property consultant. “The developer thus raises funds illegally for the same flat from two to three different parties,” he added.
Navi Mumbai-based builder, Manohar Shroff, said Navi Mumbai has become a “cheaters paradise”. “Because of a few notorious builders and brokers, the entire industry is suffering,” he said.
According to Shroff, in one instance, a builder cheated several investors and fled to Pune. In another, a builder absconded with Rs 100 crore and a third did multiple sales of shops in CBD Belapur and cheated buyers. “Purchasers must get their documents registered at earliest,” he said.
Lawyer Anil Harish, an expert on property laws, said, “It appears that even after the advent of RERA, some developers are still issuing multiple allotment letters in respect of the same premises. This is obviously wrong, both under the civil and the criminal law. But buyers have also to exercise vigilance.’’
Harish said purchasers should check the RERA website to see if the project is registered and building approvals have been obtained. “Are the premises or even the entire building mortgaged, for example for a construction loan? If so, insist on a release from the lender for the premises in question. Also take search of the records of the sub-registrar to check title and for mortgages,’’ he said.
Experts said buyers must register the agreement if more than 10% of the flat value is being paid. “Stamp duty on an allotment letter or a letter of intent or an MOU could be 1% of the price in order to encourage people to register. Credit must be given for this 1% against the stamp duty on the agreement, so later you have to pay only the remaining 4%,’’ said Harish.
Pankaj Kapoor of Liases Foras, a real estate research firm, said the basic premise of RERA was to curb such menace and practices. “The Act stipulates that developers upload information about the units mortgaged and sold on the RERA website. In the past, many builders of projects stuck in NCR and MMR were seen to be indulging in similar practices that caused extreme difficulties to consumers and lenders. Strong punitive action should be taken against such developers as it dents the consumers’ confidence and brings the whole sector to disrepute,” he said.