Before buying an apartment, homebuyers must check if the property has legal issues pending against it

The Thane case

The owner of the land in Thane where the project is coming up had filed a complaint with MahaRERA in September 2024 on various issues, including ownership rights and the fact that the developer had not disclosed details about the pending litigation in the project on the MahaRERA website.

“Thereby, he has hid the said fact, and continues to sell off to innocent homebuyers, without disclosing the legal litigation endangering the investment of the homebuyers,” the owner of the land had said in his complaint and prayed that the issue be settled for a clear title.

During the hearing, MahaRERA informed the landlord that the ownership of the project land falls beyond RERA’s purview; hence, MahaRERA cannot decide on it.

The landlord informed the regulator that he has undertaken to take appropriate legal recourse under the law against the developer and has approached the high court for arbitration.

MahaRERA, in its order, directed the developer to upload the details of pending litigations on the MahaRERA website in the pending litigation column within 15 days from the date of the order, failing which appropriate penal action would be taken against him.

Is it mandatory for developers to disclose information about pending legal cases against a project to homebuyers?

According to section 4 of the Real Estate Regulatory Act, 2016, developers are expected to disclose details about the enterprise, including its name, registered address, type of enterprise, projects launched by the developer in the past five years, whether already completed or being developed, including the current status of the said projects, delay in completion of projects, details of cases pending, details of the type of land and payments pending among several others.

MahaRERA’s order

In the recent matter, MahaRERA, after reviewing the complaint filed by the landlord, also ruled out any violation of section 4 by the developer, as the landlord filed the case after the developer had procured the MahaRERA registration.

“The said promoter (developer) had applied for registration of the said project with the MahaRERA on 21-10-2021. However, it seems that the said litigation came to be filed in 2023 after registering the said project with the MahaRERA. Hence, the MahaRERA does not find any violation of section 4 of the RERA by the respondent,” reads the MahaRERA order.

The regulator directed the developer to disclose the details on the MahaRERA website under the pending litigation column, as required by law.

The order in this context reads, “Arbitration petitions filed by the landlord against the developer are after the registration of the said project with the MahaRERA in the year 2021. However, the same needs to be disclosed on the MahaRERA website in the ‘pending litigation column’ as mandated under the provisions of section 4(2)(A) and (B) of the RERA.”

MahaRERA said in the order that as a promoter of the said project, the developer cannot escape the statutory liability imposed on it under RERA.

Buyers should do their due diligence before investing in an apartment

According to legal experts, homebuyers purchasing an apartment should do their due diligence on the project they intend to invest in, especially with regard to legal issues pending against it. This will help minimise the risk of financial loss or disputes in the future.

“A developer, as mandated by RERA, must disclose any litigation pending before any Court of law regarding the project land or project. It is advisable that homebuyers conduct thorough due diligence and verify any details regarding pending legal issues while purchasing a flat in a project,” said Trupti Daphtary, a Mumbai-based advocate and solicitor.