K-RERA Says 2/3 Allottee Consent Needed For Changes Beyond Sale Agreement

The Karnataka Real Estate Regulatory Authority (K-RERA) has reiterated that consent from two-thirds of allottees is required only when a proposed alteration goes beyond what was mutually agreed in the contract.

Relying on an appellate tribunal ruling, the authority comprising Chairman Rakesh SIngh and Member GR Reddy ruled, “The requirement of consent of 2/3rd allottees arises only when there is an alteration beyond what was mutually agreed in the contract,” the Authority observed.

K-RERA made the observation while dismissing a complaint by the Raintree Boulevard Apartment Owners Association seeking revocation of the registration of L&T Realty Developers Limited's Elara Celestia project and demolition of commercial buildings.

The dispute concerned the larger Raintree Boulevard development at Byatarayanapura, Bengaluru.

The Association alleged that the project had been marketed as predominantly residential on the basis of plans sanctioned during 2015-16. It claimed that L&T Realty later modified the development and building plans without obtaining consent from two-thirds of the allottees.

The Association alleged that the changes introduced commercial office spaces and a large mall into the development. It approached K-RERA under Section 31 of the Real Estate (Regulation and Development) Act, 2016, which allows an aggrieved person to file a complaint before the regulatory authority. The Association relied principally on Section 14, which regulates alterations to a project's sanctioned plans.

It sought, among other reliefs, revocation of the Elara Celestia registration under Section 7 and demolition of the commercial structures.

L&T Realty denied the allegations. It relied on the development plan approved by the Bangalore Development Authority (BDA) on September 18, 2015.

The developer also pointed out that its application for modification of the plan was submitted on March 28, 2017, before the relevant provisions of RERA came into force on May 1, 2017. The modified development plan was approved on December 26, 2017.

K-RERA examined the agreements executed with the allottees.

The October 19, 2016 agreement of sale expressly contemplated phased development of the Schedule-A property. It provided for residential, commercial, retail and public buildings.

The construction agreement also permitted alterations and modifications for structural, technical, improvement or other reasons. It allowed the developer, subject to approval from competent authorities, to modify development plans and layouts.

The Authority further noted that the application to modify the development plan had been made before the relevant RERA provisions came into force. It also considered the August 31, 2020 sale deed, which recorded phased development of the larger land through residential, commercial, retail and public buildings.

K-RERA held that the parties were bound by the agreements they had signed. Since the disputed development fell within the scope of those contractual provisions, the Association could not subsequently invoke Section 14(2)(ii) to insist on two-thirds allottee consent. The Authority consequently held that the question of revoking the project's registration did not arise.

On demolition, K-RERA held that its jurisdiction under RERA is confined to regulation and adjudication. It cannot assume the powers vested in municipal or town-planning authorities to order demolition of structures.

K-RERA accordingly dismissed the complaint.

For Complainant (Raintree Boulevard Apartment Owners Association): Advocate R. Ravishankar.

For Respondent (L&T Realty Developers Limited): Advocate Sujatha H.H.