MahaREAT fines builder ₹10 lakh for taking 36% of flat price without a registered sale agreement

Rules and rates as of 12 October 2026.

What the tribunal ordered

The Maharashtra Real Estate Appellate Tribunal (MahaREAT) has ordered Era Realtors Pvt. Ltd. to pay a penalty of ₹10 lakh for taking far more than 10% of a flat's price without a registered agreement for sale. It also directed the developer to refund ₹80,77,283 to the buyer, with interest.

The order, in Manojkumar Singh v. Era Realtors Pvt. Ltd. (Appeal No. AT006000000204882), was pronounced on 7 September 2026 by Chairperson Justice S.S. Shinde and Member Shrikant M. Deshpande. It sets aside a MahaRERA order of 24 November 2023 that had dismissed the buyer's complaint.

The facts, as the order records them

The buyer booked flat B-2011 in "Alta Monte Signet", a MahaRERA-registered project (P51700010463) at Borivali in Mumbai Suburban District, in 2014. The total price was ₹2,77,62,490. Between 2014 and 2015 he paid six instalments totalling ₹1,00,77,283.

No agreement for sale was executed or registered. In 2019 the two sides filed consent terms before MahaRERA, under which the developer was to execute the agreement within a year. According to the tribunal, it did not. It went on demanding instalments and then terminated the allotment. It had refunded ₹20 lakh on 24 July 2018 and kept the remaining ₹80,77,283. The tribunal recorded that the project is still incomplete and the flat has not been handed over.

MahaRERA had thrown out the buyer's later complaint, holding that the consent terms had settled the dispute. The tribunal disagreed. The developer's own failure to honour those terms gave the buyer a fresh cause of action, it said, and a term in a private settlement cannot override a statute.

Why section 13 matters

Section 13(1) of the Real Estate (Regulation and Development) Act, 2016 says a promoter "shall not accept a sum more than ten per cent" of the cost of a flat as an advance or application fee without first entering into a written agreement for sale "and register the said agreement". The tribunal also cited section 4 of Maharashtra's older flat-ownership law (MOFA), which sets a 20% ceiling before a registered agreement.

The tribunal held that the developer could not demand further instalments before executing the agreement, so the termination for non-payment was illegal. It called the continued breach of section 13, made with what it described as mala fide intent, an unfair trade practice that "warrants imposing of heavy penalty under section 61". Section 61 lets a promoter who breaks the Act be fined up to 5% of the estimated cost of the project.

The buyer had asked for a refund with interest under section 18, which applies when a promoter fails to complete a project or give possession. The tribunal agreed he was entitled to withdraw and get his money back with interest.

Worked example: how far over the limit

Using the figures in the order:

• 10% cap under section 13 = 10% × ₹2,77,62,490 = ₹27,76,249
• Amount actually paid = ₹1,00,77,283
• Share of the price paid = ₹1,00,77,283 ÷ ₹2,77,62,490 = 36.3% (the order says "around 36%")
• Paid above the RERA cap = ₹1,00,77,283 − ₹27,76,249 = ₹73,01,034
• Even against MOFA's 20% ceiling (₹55,52,498), the excess is ₹45,24,785

In other words, the developer held more than three and a half times what RERA allows before a registered agreement, for several years.

What was awarded, and what the law allows

Item	What the order says	What the law says
Advance before registered agreement	₹1,00,77,283 taken (about 36%)	Up to 10%, here ₹27,76,249 (RERA s.13)
Penalty on developer	₹10,00,000, paid into the tribunal's registry within 30 days	Up to 5% of estimated project cost (RERA s.61)
Refund to buyer	₹80,77,283, with no cancellation charges, within 30 days	Refund with interest if the buyer withdraws (RERA s.18)
Interest	2% above SBI's highest MCLR: on ₹1,00,77,283 from each payment to 24 July 2018, then on ₹80,77,283 to the order date	Interest "at such rate as may be prescribed" (RERA s.18)
Costs	₹50,000 to the buyer	At the tribunal's discretion

The order does not state the project's estimated cost, so the 5% ceiling cannot be put in rupees here. The ₹10 lakh fine goes to the tribunal, not to the buyer.

What the order does not settle

This is an appellate tribunal order and the developer may be able to challenge it in the Bombay High Court on a question of law. We have not seen any such challenge. The order also rests on its own facts: a long-stalled project, a buyer who wanted out, and consent terms the developer did not follow.

The wider point holds for any buyer in Maharashtra, though. Once you have paid 10% of the price, the law expects a registered agreement for sale before any further money changes hands. A booking form, allotment letter or receipt is not a substitute, even if the tribunal treated them here as evidence that a contract existed.