RERA imposes Rs 4.7 crore penalty on builder for pre-lauch sales

Hyderabad: Cracking the whip on illegal pre-launch sale of residential projects, the Telangana Real Estate Regulatory Authority (TG-RERA) on Thursday slapped a hefty penalty of Rs 4.7 crore on a local builder – the highest fine ever imposed for this violation in the state so far.The decision was taken following complaints by several aggrieved homebuyers who reportedly lost their money invested in the project.In its order, the authority stated that Bharathi Builders Pvt Ltd collected "substantial amounts" from buyers through pre-launch offers for its project, ‘Bharathi Lake View Apartments' in Kompally, in 2021, without obtaining the required registration under the Real Estate (Regulation and Development) Act. They did not even undertake any construction activity at the time of putting it up for sale. Worse, even though the builder assured customers of delivering the project within 24 months, it failed to do so, the authority said."In view of the absence of any indication that the project would be completed, the buyers cannot be compelled to continue in the project. Accordingly, the promoter must refund the entire amount paid by the complainants along with interest as prescribed under Rule 15 of the Telangana Real Estate Rules, 2017, within a period of 60 days," the authority observed while declaring the builder as a "default promoter".It slapped a fine of Rs 3.56 crore on the firm and ordered it to pay it along with an earlier penalty of Rs 1.19 crore imposed "in previous proceedings for similar violations". "One more entity named Sree Bharathi Builders involved in the development of the project falls within the definition of "promoter". Therefore, all such entities shall be jointly and severally liable to refund the amounts to the buyers," the authority added.Cautioning homebuyers against investing in pre-launch schemes in projects that are not registered under RERA, the authority reiterated that these offers are "strictly prohibited under the law". "Projects without RERA registration do not come under the regulatory oversight of the authority. Buyers may also lose the financial safeguard available in registered projects. It is, therefore, advised that prospective buyers verify the registration status of any real estate project on the official TG RERA portal (https://rera.telangana.gov.in) before entering into any transaction," the authority stated.