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BARE ALL OR LOSE ALL HC TELLS BUILDERS

bare-or-lose-3Builders who fail to make “full and true disclosure” beware. In an important judgment, the Bombay high court has held that a builder loses the right to engage in further construction on a plot if he fails to inform the flat buyer of the complete details of the housing project on the plot, including any future available building rights on the property. If the entire scheme, including the information about Transfer of Development Rights/Floor Space Index, is not disclosed, then the promoter loses his right to use the residual FSI, said the Bombay High Court. More importantly, striking a blow for flat owners who wait for years for the builder to form a housing society, the HC has held that the builder also loses his right over any additional building rights on the property if he fails to register a society within four months of handing over the flats or the time stipulated in the agreement. According to provisions in the Maharashtra Ownership of Flats Act (MOFA), the developer has to see that a society is registered within four months of handing over flats. It is the builder’s duty to convey the flats to the owners within a further four months, the law also says.

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