Hyderabad Developer Fined ₹4.2 Lakh by Telangana RERA for Unregistered Project Promotion

In a significant move aimed at regulating the real estate sector, the Telangana Real Estate Regulatory Authority (TRERA) has imposed a penalty of ₹4.2 lakh on Sanali Housing Projects Pvt Ltd. The developer was penalized for promoting its project, Sanali Pinnacle, located in Hyderabad's Shaikpet area, without obtaining mandatory registration under the Telangana RERA guidelines.

Violation of RERA Provisions

The penalty was levied under Section 59 of the Real Estate (Regulation and Development) Act, 2016, for violating Sections 3 and 4 of the Act. These sections mandate that real estate projects must be registered with the respective state RERA authority before they can be advertised, marketed, or sold.

The TRERA order further directed the developer to register the project under Section 3 of the Act. It explicitly stated that until the registration is completed, the developer is prohibited from advertising, marketing, booking, selling, or offering any unit in the project for sale.

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Case Overview: Sanali Pinnacle

Sanali Pinnacle is a mixed-development project with both residential and commercial units. The project is situated in Hyderabad’s upscale Shaikpet locality. According to the complainants, who are landowners, the development agreement with the developer was signed in March 2021, stipulating that construction would commence only after obtaining necessary approvals from the Greater Hyderabad Municipal Corporation (GHMC).

Despite the agreement, the developer failed to secure the requisite permissions even after three years. Adding to the breach, the developer promoted the project across various platforms, including Google and real estate websites, falsely claiming that the necessary approvals had been obtained.

Telangana RERA's Findings

TRERA determined that the developer's actions were a clear violation of Section 3(1) of the Act, which prohibits advertising or marketing real estate projects without proper registration.

The authority observed that the developer:

1. Published details of Sanali Pinnacle on its website, describing it as an "uber-luxurious apartment complex" comprising 40 units.

2. Installed on-site boards with promotional content stating "Exquisitely crafted residences for exceptional 40."

3. Promoted the project as an "ongoing project" on online platforms despite lacking approvals or TRERA registration.

The developer defended its actions, claiming that mentioning the project’s name without specific details like location or pricing does not constitute advertising. However, TRERA rejected this argument, citing Section 2(b) of the RERA Act, which defines any material shared publicly about a project as advertising, irrespective of the level of detail provided.

Key Provisions and Penalties

• Section 3 of the RERA Act: Requires that all real estate projects be registered with the respective state RERA authority before any form of promotion or sale.
• Section 59 of the RERA Act: Imposes penalties for violations, which can include hefty fines or imprisonment.

In this case, TRERA held that the promotion of Sanali Pinnacle without registration was a direct contravention of these provisions.

The Importance of RERA Compliance

This ruling highlights the importance of adhering to RERA regulations to ensure transparency and accountability in the real estate sector. Developers must:

1. Secure all necessary approvals before starting any promotional activities.
2. Register projects with the state RERA authority to protect buyers’ interests.
3. Avoid misleading advertising that can result in financial penalties or reputational damage.

TRERA’s stringent enforcement of these guidelines not only protects homebuyers from fraudulent practices but also sets a precedent for other developers in the state.

Also Read: MahaRERA Orders Verification of Occupation Certificates for Lapsed Projects

Implications for the Real Estate Sector

The Telangana RERA penalty serves as a reminder for developers across the state to comply with all regulatory requirements before initiating promotional activities. It also emphasizes the following:

• Enhanced Buyer Protection: RERA’s provisions aim to safeguard buyers from deceptive practices by ensuring that projects are adequately vetted and approved.
• Increased Accountability: Developers are held accountable for their actions, fostering trust and reliability in the sector.
• Deterrent for Non-Compliance: Penalties such as this discourage non-compliance and promote adherence to legal frameworks.

Conclusion

The ₹4.2 lakh penalty imposed by TRERA on Sanali Housing Projects Pvt Ltd underscores the necessity of adhering to RERA guidelines. This action not only safeguards the interests of homebuyers but also reinforces the regulatory framework governing the real estate sector in Telangana.

For developers, this serves as a clear message: compliance with RERA is non-negotiable, and violations will be met with strict penalties. As TRERA continues to enforce its provisions, the real estate sector in Telangana is likely to see increased transparency and consumer trust.

By upholding RERA’s principles, authorities can ensure that the real estate market operates in a fair, transparent, and buyer-friendly manner, ultimately benefiting all stakeholders involved.

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