Hyderabad Real Estate: TGRERA Imposes ₹13.74 Lakh Fine on Builder for Improper Sale Agreement

Hyderabad: The Telangana State Real Estate Regulatory Authority (TGRERA) has imposed a fine of ₹13,74,436 on a builder for failing to follow proper procedures in the sale of an apartment. The fine was imposed after the builder did not use the correct format for the Agreement of Sale (AOS) and also failed to register the agreement, violating key provisions of the Real Estate (Regulation and Development) Act, 2016.

The penalty was confirmed by a three-member panel led by Chairman Dr. N. Satyanarayana, along with members K. Srinivasa Rao and Laxmi Narayana Jannu, in response to Complaint No. 158 of 2024. The complainant, Veluri Adi Lakshmi, had approached TGRERA with concerns about the builder, Vineela Arani, who was constructing a multi-story building in Kondapur, Serilingampally mandal.

Lakshmi had planned to purchase a flat on the fifth floor of the building for ₹1,14,32,000 and had already paid ₹63,45,000 in installments. However, she alleged that the builder refused to register the apartment and was demanding extra money, citing a price escalation. After withdrawing from the project, Lakshmi received a refund from the builder, except for a ₹95,000 "booking amount." The Authority ruled that since the buyer canceled the deal, she was not entitled to a refund of the booking amount.

The penalty on the builder was based on two main rule violations:

Violation of Agreement Format: According to Rule 38 of the Real Estate Act, the Agreement of Sale must be identical to the draft agreement that the builder submitted to the Real Estate Regulatory Authority (RERA) during the project registration. In this case, the builder used a completely different version of the agreement, which led to the fine.

Failure to Register Agreement: The builder also violated Section 13 of the Act, which mandates the registration of the Agreement of Sale once it is signed. The agreement between Lakshmi and the builder, dated 25th January 2024, was not registered, which led to another penalty.

The TGRERA has ordered the builder to pay the fine of ₹13,74,436 to the RERA fund within 30 days. The builder was also instructed to follow all the legal requirements for the Agreement of Sale, as originally submitted to the project website. The authority warned that any future violations could result in additional penalties under Section 63 of the Act.

This case highlights the importance of builders following legal processes to protect buyers' rights and avoid penalties.