Prospective Buyer Lacks Authority To File Complaint Without Booking Or Agreement: Andhra Pradesh RERA

The Andhra Pradesh Real Estate Regulatory Authority (RERA) on 5 February, held that a prospective buyer who has neither booked a unit nor entered into an agreement for sale cannot be termed an “aggrieved person” under Section 31(1) of the Real Estate (Regulation and Development) Act, 2016, and therefore cannot maintain a complaint before the Authority.

Chairperson A. Siva Reddy and Member M. Venkata Ratnam, dismissed proceedings initiated by Bellana Bangaru Naidu against Hayagreeva Farms and Developers as not maintainable. They held:

“A person who has not booked a unit or entered into a registered agreement lacks the locus standi to seek specific reliefs against a project as they have no 'privity of contract' or vested interest in the project's assets.”

The dispute arose from a complaint filed by Naidu under Section 31 of the Act against Hayagreeva Farms and Developers and its partners in relation to the “Hayagreeva Farms Villa Project” in Visakhapatnam. He sought multiple reliefs, including restraining the developer from marketing or selling units, directing a detailed inquiry into the project, freezing bank accounts, and imposing penalties for alleged violations.

During the proceedings, the Authority had, on 23 June 2025, passed an interim order directing the District Collector, Visakhapatnam, to undertake a comprehensive inquiry into the title and legal status of the project. The Collector was tasked with verifying disclosures made at the time of registration, identifying pending litigations, and submitting a detailed report within 30 days. The order was dispatched on 24 June 2025. However, no report was received.

The matter saw multiple hearings between March and November 2025 and was finally taken up on 5 February 2026, when Naidu appeared in person and sought disposal of the complaint. At this stage, the Authority examined whether any allotment or contractual nexus existed between Naidu and the developer.

Naidu alleged irregularities in the project and urged regulatory intervention. Hayagreeva Farms and Developers, in response, contested his locus, asserting that he had no contractual or financial engagement with the project.

The Authority agreed with the developer. It found that Naidu had failed to produce any Agreement for Sale or evidence of allotment and had also not demonstrated payment of any advance, deposit, or consideration.

The Authority's reasoning centred on the doctrine of privity of contract. It held that the statutory right to approach RERA is confined to an “aggrieved person” under Section 31(1), which arises only where there exists a direct legal or contractual relationship with the project. It held that a mere prospective buyer does not satisfy this threshold.

It further observed that Naidu's position was that of an interested party, not an allottee. In the absence of any concluded transaction, he lacked enforceable rights and could not seek project-specific reliefs.

Significantly, the Authority also flagged regulatory concerns, noting that the developer had declared “No Pending Litigation” on the AP RERA portal despite multiple cases, including a pending writ petition and a public interest litigation.

While declining relief to Naidu, the Authority clarified that it retains the power to initiate suo motu action for such non-disclosures and directed the authorised officer of the complaint cell to place the matter before the Authority in its next meeting for appropriate action.

Accordingly, it concluded that Naidu did not qualify as an aggrieved person under the Act and dismissed the complaint as not maintainable.