The Telangana State Real Estate Regulatory Authority (TGRERA) has taken strict action against a Hyderabad-based builder for failing to comply with the Real Estate (Regulation and Development) Act, 2016 (RERA). The builder, Vineela Arani, was penalized ₹13,74,436 for not using the prescribed Agreement of Sale (AOS) format and for failing to register the agreement, violating key provisions of the Act. This ruling reinforces the necessity for builders to adhere strictly to RERA regulations to protect homebuyers’ interests.
Case Background
The complaint was filed by Veluri Adi Lakshmi (Complainant No. 158 of 2024) against the builder Vineela Arani, who was constructing a stilt-plus-five-storied residential project at Park Avenue, Kondapur, Serilingampally Mandal. The complainant intended to purchase a flat on the fifth floor for ₹1,14,32,000 and had paid ₹63,45,000 in installments.
However, the builder allegedly refused to register the Agreement of Sale and demanded additional money citing price escalation. Consequently, the complainant withdrew from the project, and the builder refunded the amount except for ₹95,000, which was held as a ‘booking amount.’ The authority ruled that since the cancellation was initiated by the buyer, the booking amount was non-refundable.
TGRERA’s Findings and Penalties
The three-member TGRERA panel, led by Chairman Dr. N Satyanarayana and members K Srinivasa Rao and Laxmi Narayana Jannu, found two major violations by the builder:
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Non-Compliance with Rule 38 – Improper Agreement of Sale Format
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The Real Estate Regulatory Authority requires builders to submit a draft Agreement of Sale at the time of project registration under Rule 38.
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The agreement used in this case was completely different from the one submitted during registration.
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TGRERA ruled that the builder’s AOS should be “verbatim the same” as the registered draft agreement.
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Violation of Section 13 – Failure to Register the Agreement of Sale
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Under Section 13 of the RERA Act, 2016, an Agreement of Sale must be registered when executed.
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The builder failed to register the agreement executed on January 25, 2024, violating this mandate.
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Penalty and Compliance Orders
As a result, TGRERA imposed a total fine of ₹13,74,436 on the builder and ordered payment within 30 days to the RERA fund. Additionally, the authority directed the builder to strictly comply with RERA guidelines and ensure that all future Agreements of Sale match the approved format submitted to the project website. Any further violation would attract additional penalties under Section 63 of the Act.
Impact of the Ruling
This case serves as a strong warning to builders regarding adherence to RERA norms. It highlights the importance of:
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Using the prescribed Agreement of Sale format.
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Registering agreements as per legal requirements.
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Avoiding unfair practices such as price escalation demands post-agreement.
For homebuyers, this ruling provides reassurance that regulatory authorities are actively enforcing compliance and protecting their interests against unlawful builder practices.
Conclusion
TGRERA’s decision to impose a hefty penalty on the builder for non-compliance with RERA underscores the need for strict regulatory adherence in the real estate sector. Builders must ensure that all legal agreements follow the prescribed formats and are duly registered to avoid penalties and legal complications. Homebuyers, on the other hand, should remain vigilant and ensure that their agreements align with RERA requirements before proceeding with any property purchase.
