One of the key responsibilities of a real estate developer under the Real Estate (Regulation and Development) Act (RERA), 2016, is to ensure the formation of a cooperative housing society or association of allottees. Despite this, many homebuyers face situations where developers delay forming the society, causing inconvenience in property management, utility transfers, and legal ownership documentation.
Legal Obligation of Developers
Under Section 11 of RERA, the developer (promoter) has several statutory obligations:
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Formation of Society or Association: The developer must form the society within three months of selling more than 50% of the flats.
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Project Completion: The builder must complete the project within the time limit declared to MahaRERA.
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Extension of Completion Date: If the project remains incomplete, the developer must seek an extension from MahaRERA with the consent of two-thirds of the allottees.
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Handover of Documents: Once the society is formed, the builder must handover all property documents and common area details to the society.
Practical Challenges for Homebuyers
In reality, homebuyers often take possession without the Occupation Certificate (OC) due to personal or financial constraints. This leads to several challenges:
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Difficulty in transferring electricity or water connections to individual names
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Additional charges demanded by the builder for NOCs or approvals
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No unified management for maintenance, repairs, or security services
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Delay in conveyance deed execution, which affects ownership rights
Actions Homebuyers Can Take
If the developer delays society formation, the allottees have several remedies:
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Check the Agreement for Clauses on Charges
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Verify if the builder has already collected charges for utility connections. Any additional demand for NOC can be challenged.
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File a Complaint with MahaRERA
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Non-formation of society and delay in project completion are statutory violations under RERA.
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MahaRERA can penalise the developer and award compensation for the inconvenience caused to allottees.
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Form the Society Independently
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If the developer is non-cooperative, allottees can initiate the formation of a society under the Maharashtra Cooperative Societies Act.
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This step ensures legal ownership of common areas and allows members to manage maintenance and utilities collectively.
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Collective Action Works Best
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Forming a buyers’ group strengthens the case before MahaRERA and increases pressure on the developer to comply.
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Maintain documentary evidence of requests made to the builder for society formation.
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Conclusion
Delays in society formation by developers are both inconvenient and legally actionable. RERA gives buyers the right to enforce compliance, seek penalties, and even form the society themselves if required. Acting collectively and using the legal provisions under RERA and the MCS Act ensures that homebuyers are not left powerless in the face of developer inaction.
