The Tamil Nadu Real Estate Regulatory Authority (TNRERA) has imposed a penalty of ₹50,000 on Emerald Haven Development Limited for accepting more than 10% of an apartment’s cost without registering the sale and construction agreements for its project in Chennai.
In its order dated October 13, the authority directed the promoter to register the agreements and execute the conveyance deed within 30 days. The order highlights the statutory obligations of promoters under Section 13 of the Real Estate (Regulation and Development) Act, 2016, which restricts the collection of more than 10% of an apartment’s cost before entering into a written agreement for sale and registering it.
The case also involved allegations by two homebuyers that the project had been misleadingly advertised as being located in Anna Nagar, resulting in a higher purchase price. However, TNRERA accepted the promoter’s explanation regarding the location discrepancy and found no violation of Section 12 of the RERA Act.
Homebuyers Allege Misleading Advertisement About Project Location
The dispute arose from allegations made by two homebuyers who purchased apartments in a project developed by Emerald Haven Development Limited in Chennai.
According to the buyers, the promoter advertised the project as being situated in the “heart of Anna Nagar“ and used PIN code 600040, which is associated with Anna Nagar. However, the project was recorded as being located in Padi, which has PIN code 600050.
The complainants alleged that the discrepancy between the advertised location and the project’s recorded location misled them into believing that the property was situated in Anna Nagar.
They contended that the representation influenced their purchasing decision and caused them to pay a price higher than the prevailing market value in Padi. The buyers claimed to have suffered a financial loss of at least ₹1.1 crore.
On this basis, they sought action against the promoter under Section 12 of the RERA Act, which deals with obligations relating to the veracity of advertisements or prospectuses.
Promoter Denies Deliberate Misrepresentation
Emerald Haven Development Limited denied deliberately misrepresenting the project’s location.
The promoter submitted that the project was situated in Anna Nagar West Extension and fell under PIN code 600040. It argued that the discrepancy in the project’s RERA registration certificate was a clerical error rather than an attempt to mislead prospective purchasers.
The company also stated that it had approached the Chennai Metropolitan Development Authority (CMDA) and the Greater Chennai Corporation (GCC) to rectify the discrepancy.
After considering the promoter’s explanation, TNRERA accepted its position regarding the location issue and found no violation of Section 12 of the RERA Act.
Consequently, the allegations concerning misleading advertisements did not result in a finding of statutory violation under that provision.
TNRERA Finds Violation of Section 13 of the RERA Act
Although TNRERA did not find a violation of Section 12, it identified a separate violation concerning the registration of the sale and construction agreements.
According to the authority’s order, the agreements executed on July 17, 2025, remained unregistered.
Section 13 of the RERA Act, 2016, prohibits a promoter from accepting an amount exceeding 10% of the cost of an apartment, plot or building as an advance or application fee without first entering into a written agreement for sale and registering that agreement in accordance with applicable law.
The provision is intended to ensure that the contractual terms governing a real estate transaction are formally documented before a promoter collects a substantial portion of the purchase consideration.
In this case, TNRERA found that the promoter had accepted payments exceeding the statutory threshold without completing the required registration formalities.
The authority’s action therefore concerned the promoter’s failure to comply with Section 13, irrespective of its decision on the separate allegations relating to the project’s advertised location.
Buyers Paid ₹1.72 Crore Against Total Consideration of ₹2.88 Crore
The financial details considered in the case demonstrate the extent of the payments made by the buyers before the agreements were registered.
| Particulars | Amount |
|---|---|
| Total apartment consideration | ₹2.88 crore |
| Amount paid by the buyers | ₹1.72 crore |
| Approximate percentage of consideration paid | 59.72% |
| Statutory threshold under Section 13 | 10% |
The buyers had paid ₹1.72 crore out of the total consideration of ₹2.88 crore, substantially exceeding the 10% threshold prescribed under Section 13.
Ten per cent of the total consideration amounted to ₹28.8 lakh. The amount paid by the buyers was therefore significantly higher than the statutory threshold applicable before the agreement for sale was entered into and registered as required by law.
The failure to register the agreements led TNRERA to impose a penalty on the promoter and direct it to complete the outstanding formalities.
Promoter Directed to Register Agreements Within 30 Days
In its October 13 order, TNRERA imposed a penalty of ₹50,000 on Emerald Haven Development Limited for the violation relating to the unregistered agreements.
The authority also directed the promoter to complete the following steps within 30 days:
- Register the sale and construction agreements in accordance with the applicable legal requirements.
- Execute the conveyance deed to complete the required conveyance formalities.
- Comply with the authority’s directions concerning the outstanding statutory obligations.
The directions require the promoter to regularise the contractual documentation and complete the conveyance formalities within the stipulated period.
Significance of the Order for Homebuyers and Developers
The order highlights an important distinction between allegations of misleading advertisements and violations of statutory requirements governing real estate transactions.
In this case, TNRERA accepted the promoter’s explanation concerning the project’s location and found no violation of Section 12. However, the authority independently examined whether the promoter had complied with Section 13 before accepting payments exceeding 10% of the apartment’s cost.
The decision reinforces the importance of registering the agreement for sale before collecting more than 10% of the apartment’s cost. Promoters must ensure that the prescribed contractual formalities are completed before accepting payments beyond the statutory limit.
For homebuyers, the case underscores the importance of verifying project details, reviewing the agreement for sale and checking whether the necessary documents have been registered.
Conclusion: The ₹50,000 penalty imposed on Emerald Haven Development Limited demonstrates that compliance with the agreement-registration requirements under Section 13 remains a distinct statutory obligation, even when separate allegations concerning misleading advertisements are not established.
