Resort Villas Sold By Keemaya Resorts Under Leaseback Model Must Be Registered; Buyers Are Allottees: Rajasthan RERA

Holding that resort villas sold by Keemaya Resorts under a Perpetual Lease Aggregation Agreement (sale-and-leaseback model) are part of a “real estate project” under the Real Estate (Regulation and Development) Act, 2016, the Rajasthan Real Estate Regulatory Authority (RERA) ruled that such projects must be registered and that buyers qualify as “allottees.”

A coram of Member Sudhir Kumar Sharma observed, “All these documents whether it is brochure of the project or sale deed and PLAA executed in favour of another person 'X', clearly proves that the project was envisaged as Real Estate Project, the Respondent is a Promoter, who sold or booked the Villas for purpose of selling and then taking back management to Resort Management Company through lease,. Every persons who booked the Villa is / was an allottee.”

It added, “If the definitions of allottees, Apartment, Building, Promoter and Real Estate Project as provided in the Act and given above, are read in the context of reply, brochure, sale deed and PLAA submitted by the Respondent, it clearly, without any doubt, emerges that the complainants are definitely an allottee to whom pool serviced Villa was allotted.”

On the issue of registration, it held, “Thus, in view of above observations, the project of the respondent was required to be registered under the Act. The respondent has violated this statutory provision of Section 3 of the Act, for which penalty is to be imposed upon him under Section 59 of the Act, which may extend up to 10% of the estimated cost of the project.”

The dispute arose from the “New World Jaipur Resort” project, where Keemaya Resorts marketed pool-serviced villas as investment products offering assured returns through a Perpetual Lease Aggregation Agreement (PLAA), under which units sold to buyers were leased back for resort operations.

Two investors, Anuj Singh and the legal heirs of Sapna Singh, invested Rs 19.60 lakh each between December 2022 and February 2023. The developer projected possession from April 1, 2023.

Despite receiving substantial payments, the developer failed to provide key documents, including the agreement, and did not hand over possession. A legal notice dated May 31, 2024 seeking refund went unanswered, following which the complainants approached the Authority under Section 31 of the Act.

Questioning jurisdiction, Keemaya Resorts contended that the project was a hospitality venture and not a “real estate project,” and that under the PLAA model, buyers were merely investors in a revenue-sharing arrangement and not “allottees.”

Rejecting this defence, the Authority held that the structure involved sale of units followed by leaseback for management and could not be used to bypass the Act. It noted that the sale deed treated buyers as purchasers, with stamp duty paid as a sale and not as a lease.

Calling out the structure adopted, the authority observed, “Now, we have a classic example of deviation from the general execution of sale deed, where a provision of perpetual lease is added in paragraph 14 within the sale deed. This document has been given a form where both sale deed and lease are mentioned together. The Transfer of Property Act mentions seven types of property transfers, where sale is a separate category and lease is another category. This hybrid mode of property transfer, where sale is effected and the seller is also getting the property back on lease, from the buyer, is making the transaction more complex. It is clear that the builder (seller) knew that a separate document had to be created for lease i.e. Perpetual Lease Aggregation Agreement (PLAA). The lease clause was added to the sale agreement, making it complex and thus, attempting to reduce the buyer's rights.”

Accordingly, the Authority directed Keemaya Resorts to refund Rs 19.60 lakh each to the complainants with interest at 10.80% per annum, imposed a Rs 50 lakh penalty for non-registration, and directed immediate registration of the project

For Complainants (Anuj Singh; Sapna Singh through legal heirs): Advocates Manan Ambawani, Atishay Jain.

For Respondent (Keemaya Resorts and SPAs LLP): Advocates Himanshu Goyal and Yashwant Suwalka.