Penalty of 2% of project cost on promoter for violation of RERA and MOFA

Judgment dated  16.9.2026 of the Maharashtra Real Estate Appellate Tribunal, Mumbai, in Appeal No.AT06/00804/2025 in Complaint No.CC006000000395936 of 2023 of RA Residences Coop Housing Society   Vs.  RA Associates and others

📌 Crux Takeaways

• Blanket Consent Rejected: Tribunal held that pre‑printed clauses in sale agreements do not amount to informed consent under MOFA s.7 / RERA s.14.

• Mandatory Conveyance: Promoters ordered to execute conveyance deed within 60 days, based on original 2017 plan FSI.

• Commercial Profits Apportioned: Net proceeds from illegally expanded 4,225.57 sq.m. of commercial FSI to be shared with the society.

• RERA Penalty: 2% of total project cost imposed under s.61 RERA for statutory violations.

• Embargo on Future Expansion: Developer permanently barred from using additional FSI/TDR without 2/3rd allottees’ prior written consent.

• Amenities Restored: 64 guest parking spaces to be handed over within 4 months.

• Financial Accountability: Audited accounts of maintenance/corpus funds to be disclosed and refunded with interest.

📝 Doctrinal Note

This judgment reinforces that MOFA’s consent requirement is substantive, not formalistic. Blanket clauses cannot override statutory duties under MOFA ss.3, 4, 7, 10, 11 and Rule 3 (1964 Rules). It strengthens societies’ bargaining power against unilateral FSI/TDR exploitation by promoters

Sections 3, 4, 4A, 7, 7A, 10 and 11 of MOFA in respect of the general liabilities of the promoter, promoter to enter into agreement before accepting advance or deposit, effect of non-registration of agreement required to be registered under section 4 and the promoter to convey the title, etc;