MahaREAT Orders 2% Penalty and Sale Proceeds Sharing in Dadar East Project
Mumbai, Maharashtra | September 19, 2026: Homebuyers at RA Residences in Dadar East have received a significant ruling from the Maharashtra Real Estate Appellate Tribunal (MahaREAT), which has directed the project's promoters to pay a penalty equivalent to 2% of the project cost, share proceeds from certain commercial units with allottees and execute conveyance of the residential building in favour of the society.
The tribunal's order also requires 64 remaining guest-parking spaces to be handed over to the society and puts the spotlight on the need for prior informed consent when developers substantially alter an approved project plan.
MahaREAT Orders 2% Penalty on Project Promoters
The tribunal directed the promoters to deposit a penalty of 2% of the project cost.
It also ordered the execution of a conveyance deed in favour of the society for the residential building, proportionate to the FSI consumed under the 2017 sanctioned plan, along with the building's common areas and amenities.
The order addresses several disputes raised by the society concerning changes to the project's development and the use of additional development potential.
Commercial Sale Proceeds to Be Apportioned Among Allottees
One of the most significant directions concerns the project's commercial building.
MahaREAT directed the promoters to apportion among the allottees the sale proceeds from commercial units constructed using additional FSI/TDR beyond what was contemplated under the 2017 plan.
This direction could have a direct financial implication for the residential allottees because the tribunal linked the additional development to changes beyond the development plan that formed the basis of their agreements.
Commercial Building Area More Than Doubled
The tribunal compared the project plans presented to allottees in 2017 with the revised plan approved in 2021.
The residential building's built-up area/FSI increased from 30,540.77 sq m to 31,769.76 sq m.
The commercial building, however, saw a much larger increase, with its area rising from 3,231.63 sq m to 7,473.74 sq m through additional premium FSI.
MahaREAT held that such a substantial deviation required the promoters to obtain prior informed consent from the allottees.
Tribunal Stresses Prior Consent for Major Plan Changes
The tribunal said consent from allottees must be specific and based on full disclosure.
It found that the agreements did not provide sufficient details about the proposed use of TDR or FSI from other land.
For homebuyers, the ruling reinforces the importance of understanding the sanctioned development plan forming the basis of their sale agreements and whether subsequent changes could materially affect common areas, development potential or the project layout.
64 Guest Parking Spaces to Go to Society
The promoters have also been directed to demarcate and hand over 64 remaining guest-parking spaces to the society.
The society had originally approached MahaRERA alleging, among other issues, encroachment on mandatory guest-parking and recreational-ground areas and the use of common areas for ground-floor commercial offices.
The dispute subsequently reached MahaREAT.
Conveyance Cannot Be Indefinitely Delayed
MahaREAT also addressed the issue of conveyance of the residential building.
The tribunal held that once a building is complete, an occupation certificate has been obtained, possession has been handed over and the society has been registered, the obligation to execute conveyance under Section 11 of RERA arises.
According to the tribunal, that statutory obligation cannot be indefinitely postponed through a contractual condition linking conveyance to completion of the entire project.
Additional FSI Cannot Be Used Indefinitely After Conveyance Obligation Arises
The tribunal further held that once the development potential disclosed to allottees has been exhausted and the obligation to convey the property has arisen, subsequently available additional FSI/TDR cannot be used to create additional structures or floors.
The project consists of two residential buildings and one IT/commercial building. It was originally scheduled for completion in June 2018, with the deadline subsequently extended to 2019 and then to March 2025.
The order therefore has implications beyond the immediate dispute, particularly for societies dealing with delayed conveyance, additional FSI/TDR and changes to sanctioned development plans.
What Property Owners and Societies Should Check
The ruling highlights several documents that existing and prospective buyers should examine in large redevelopment or mixed-use projects:
- Sanctioned plans forming the basis of sale agreements
- Subsequent revisions to FSI and TDR utilisation
- Consent obtained from allottees for material changes
- Occupation certificates and possession records
- Conveyance documentation
- Common areas and amenities promised to the society
- Parking and recreational-ground allocations
For housing societies, the order also underscores that conveyance and control over common property cannot necessarily be kept pending indefinitely because of contractual conditions.