The Maharashtra Real Estate Regulatory Authority (MahaRERA) has ruled that a homebuyer can seek a refund of money collected by a developer towards a proposed clubhouse if the promised amenity is not constructed within a reasonable period.

In a recent order, the regulator directed a Mumbai-based developer to refund ₹5 lakh, that had been collected as clubhouse membership charges after finding that the promised facility had not been built, even more than six years after the apartment was handed over, according to a report by the Hindustan Times.

The case

The dispute involved a homebuyer who purchased an apartment in a Mumbai housing project and took possession in October 2019. The buyer approached MahaRERA seeking a refund of the ₹5 lakh clubhouse charges, plus interest, arguing that despite taking possession over six years ago, the developer had failed to construct or provide access to the promised clubhouse.

According to the complaint, several years had elapsed since both the execution of the agreement for sale and the handover of possession, yet the developer had neither completed nor made the clubhouse available to residents, prompting the buyer to seek a refund with interest.

“It is contended that the developer has also failed to provide any membership rights, access or benefit of the proposed clubhouse while continuing to retain the amount collected from the complainant,” the homebuyer said.

Developer’s defence

The developer submitted to MahaRERA that the said project is only one phase of a larger integrated redevelopment scheme and that the proposed clubhouse is envisaged as a common amenity for the entire larger layout and not exclusively for the said project.

“The clubhouse would be developed upon substantial completion of the larger layout, and the collection of clubhouse charges at the time of possession was in accordance with the contractual arrangement between the parties. The complainant, having acted upon and derived benefits under the agreement for sale, cannot subsequently resile from its contractual obligations,” the developer told MahaRERA.

According to the developer, the delay was caused by the relocation of an existing BEST bus depot and the need to obtain statutory approvals from authorities, adding that construction of the clubhouse had not been abandoned.

“The agreement for sale contemplated collection of clubhouse charges at possession and provided for a refund only if the clubhouse was ultimately not constructed,” the developer submitted to MahaRERA.

While examining the dispute, MahaRERA noted that the agreement for sale did not prescribe a specific timeline for completion of the clubhouse but clearly envisaged the amenity as part of the larger development.

The agreement also stated that if the developer did not construct the clubhouse within five years of the agreement’s date, the membership amount would be refunded without interest.