MahaRERA Orders Refund of Clubhouse Charges After Six-Year Delay

A promised amenity is not merely a marketing feature—it is a contractual commitment. Reinforcing the rights of homebuyers, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has ruled that developers cannot indefinitely retain money collected for facilities that remain unbuilt. The order underscores that buyers are entitled to seek a refund when a promised amenity is not delivered within a reasonable period, strengthening accountability in the real estate sector.

Refund for an Unfulfilled Promise

In a significant order, MahaRERA directed a Mumbai-based developer to refund ₹5 lakh collected as clubhouse membership charges after finding that the promised facility had not been constructed even more than six years after possession of the apartment was handed over.

The authority observed that once an amenity remains unavailable for an unreasonable period, buyers cannot be expected to continue waiting while developers retain money collected specifically for that facility.

Background of the Dispute

The dispute involved a homebuyer who purchased an apartment in a Mumbai housing project and took possession in October 2019. The buyer approached MahaRERA seeking a refund of the ₹5 lakh clubhouse charges, along with interest, contending that despite several years having passed since possession, the promised clubhouse had neither been constructed nor made available for residents.

According to the complaint, although the agreement for sale had been executed and possession had been handed over, the developer failed to provide access to the proposed clubhouse, prompting the buyer to seek a refund.

The homebuyer stated:

“It is contended that the developer has also failed to provide any membership rights, access or benefit of the proposed clubhouse while continuing to retain the amount collected from the complainant.”

Developer’s Stand

The developer submitted that the project formed only one phase of a larger integrated redevelopment scheme and that the proposed clubhouse was intended as a common amenity for the entire layout rather than exclusively for the concerned project.

It further argued that the delay resulted from the relocation of an existing BEST bus depot and the need to obtain statutory approvals, while maintaining that construction of the clubhouse had not been abandoned.

The developer also stated:

“The clubhouse would be developed upon substantial completion of the larger layout, and the collection of clubhouse charges at the time of possession was in accordance with the contractual agreement between the parties. The complainant, having acted upon and derived benefits under the agreement for sale, cannot subsequently resile from its contractual obligations.”

Additionally, it contended:

“The agreement for sale contemplated collection of clubhouse charges at possession and provided for a refund only if the clubhouse was ultimately not constructed.”

MahaRERA’s Findings

After examining the agreement for sale, MahaRERA observed that while the document did not prescribe a specific timeline for completion of the clubhouse, it clearly envisaged the amenity as part of the larger development.

The agreement also provided that if the clubhouse was not constructed within five years from the date of the agreement, the membership amount would be refunded without interest.

MahaRERA noted:

“The agreement does not prescribe any specific timeline for completion of the clubhouse. In the absence of any agreed timeline establishing default in construction of the said amenity and having regard to the contractual stipulation governing refund, the complainant is entitled to refund of the said amount, without interest.”

Final Order

Accordingly, MahaRERA directed the developer to refund ₹5 lakh collected towards the proposed clubhouse within 60 days. However, the authority declined to award interest, observing that the agreement for sale specifically provided that any refund of clubhouse charges would be made without interest and did not prescribe a definite timeline for construction of the amenity.

A Reminder on Developer Accountability

Beyond the individual dispute, the order sends a clear message to the real estate sector that amenities promised to homebuyers cannot remain on paper indefinitely. While contractual terms govern the relationship between buyers and developers, prolonged non-delivery of promised facilities cannot justify the retention of buyers’ money. The ruling reinforces accountability in project execution and strengthens consumer confidence in Maharashtra’s real estate regulatory framework.

By Sana Khan
Executive Editor,
Realty Quarter
Mumbai