Tamil Nadu

Builder acquiring existing project has to fulfil the obligations of erstwhile promoter, says TNRERA

The Tamil Nadu Real Estate Regulatory Authority (TNRERA) has ruled that a builder who has acquired an ongoing project, has to fulfil all obligations of the erstwhile promoter to home buyers, and is liable for any breach or delay.

In their complaint, Bhoomijha Murali and K.V. Murali said that they entered into an agreement in 2011 for the purchase of a flat with Hiranandani Palace Gardens Private Limited, the developer, and Green Habitats Private Limited, the land-owning company, in a project located at Senthamangalam Village, Chengalpattu Taluk, Kancheepuram District.

The agreed price was about ₹74.4 lakh and the property was supposed to be handed over in January 2013, they said. The home buyers claimed they have paid an amount of about ₹68.6 lakh and only ₹5.8 lakh remains to be paid towards amenities, which is payable only at the time of handing over of the flat. They said the flat has not been handed over as yet.

Meanwhile, the project was acquired by Lucifer Constructions in 2014 via an auction sale held by HDFC Bank for non-payment of dues by Hiranandani Palace Gardens and Green Habitats, and Evita Constructions was appointed as as developer for the project.

The new owner and developer of the project argued that there was no ‘privity of contract’ between them and the home buyers prior to take over of the project, and delay in handing over is only attributable to the erstwhile promoters. They also said the home buyers can take possession of the flats by paying a balance about ₹11.20 lakh as per the supplementary agreement sought by them.

TNRERA rejected the argument and said the new promoters, having purchased immovable property of the project, are stopped from claiming that there is no obligation on their part, it added.

Under section 15(2) of the Act, the new promoters are required, as promoters, to independently comply with all pending obligations as per the agreement of sale entered into by the erstwhile promoter and the allottees. The intending promoter shall be liable to the consequences of breach or delay, as the case may be, as per the provisions of the Act, TNRERA said.

It directed the new promoters to hand over the apartments completed in all respects to the home buyers by September 30, 2020, strictly as per the agreement for sale and development agreement entered between the complainants and erstwhile promoter, and also collect dues as per these agreements.

Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | Oct 1, 2020 6:41:04 AM | https://www.thehindu.com/news/national/tamil-nadu/builder-acquiring-existing-project-has-to-fulfil-the-obligations-of-erstwhile-promoter-says-tnrera/article32530048.ece

Next Story