Hyderabad: The Telangana Real Estate Regulatory Authority (TGRERA) on Thursday, June 25, imposed a fine of Rs 14.95 lakh on a Hyderabad construction firm for `illegally’ collecting money before obtaining mandatory RERA registration.
The authority also said that the firm, R Homes failed to make significant progress on the project.
Buyer misled through offers
RERA imposed the penalty after a complainant said that he was misled by the company’s pre-launch offer, assurance from the representatives of the firm. The complainant stated that R Homes convinced him that the project was approved by RERA.
According to RERA, the complainant paid Rs 14.95 lakh from December 2020 to February 2021 for the proposed apartment.
TG RERA held that the developer attempted to bypass the provisions of the RERA Act by executing “Agreements for Investment” instead of formal sale agreements.
The authority observed that merely changing the nomenclature could not alter the true nature of the transaction. Since the agreements identified apartments, fixed prices, and listed project amenities, they effectively amounted to agreements for sale and attracted all obligations under the RERA Act.
Project registered later
RERA also observed that the firm collected money from buyers regarding the project, before registering with the authority in September 2023.
TG RERA said that accepting advances and marketing an unregistered project constituted a clear violation of Section 3 of the RERA Act.
Only 1 per cent construction completed
Following an inspection, it was found that only 1 per cent of the total construction had been completed, and there was no active work at the site.
The authority also found that the promoter had did not submit mandatory quarterly progress reports, audited financial statements, and other statutory disclosures required under the Act.
Refund with interest within two months
Following the complaint, TG RERA asked R Homes to refund Rs 14.95 lakh to the complainant along with 10.70 per cent annual interest, calculated from the respective dates of payment until actual realization. The refund must be issued within 60 days.
Cancellation of registration
Apart from ordering the refund, TG RERA directed its Secretary to issue a show-cause notice proposing cancellation of the project’s registration under Section 7 of the RERA Act.
The Authority also ordered initiation of penalty proceedings under Sections 59 and 60 of the Act for violations relating to project registration and collection of money before executing valid agreements.
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