HYDERABAD: The Telangana Real Estate Regulatory Authority (RERA) Appellate Tribunal has issued a crucial ruling stating that landowners who engage in joint development agreements (JDAs) with developers do not qualify as “allottees” or “aggrieved persons” under the RERA Act. Consequently, they cannot seek legal recourse against developers through the RERA authority.
This decision was made by a tribunal led by chairman Justice A Santhosh Reddy, with judicial member P Pradeep Kumar Reddy and administrative member Chitra Ramachandran. They emphasized that the mere presence of basic project information on a company’s website, under the ‘ongoing projects’ section, does not constitute advertising or illegal marketing prior to registration.
The ruling arose from appeals initiated by Sanali Housing Projects and Mohammed Mushtaq & family, who are the landowners involved in a proposed residential-cum-commercial project named Sanali Pinnacle in Shaikpet, Hyderabad. The conflict stemmed from a development agreement coupled with an irrevocable general power of attorney executed on April 30, 2021.
Previously, the RERA authority had penalized the developer with a fine of Rs 4,27,013 under Section 59 of the Act, citing a complaint, and mandated the registration of the project before it could proceed with any marketing or sales activities. While the landowners appealed for an increased penalty, the developer contested the validity of the order.
After reviewing the arguments, the tribunal overturned the RERA order and instructed that the fines be refunded to the developer, declaring the initial decision “not sustainable in law.”
In a comprehensive 14-page judgment, the tribunal asserted that landowners involved in JDAs are to be regarded as “co-promoters” rather than consumers or allottees. Moreover, it clarified that signage displaying solely the developer’s name at a project site, absent any offers, pricing, or sales data, does not constitute advertisements under RERA. Similarly, listing a project as “ongoing” on a website without specifics such as location or prices cannot be seen as marketing or solicitation.
Legal experts believe this ruling clarifies a long-standing ambiguity regarding the ability of landowners in joint development projects to independently seek remedies under RERA against their developer partners.
