MahaREAT orders Mumbai developer to execute conveyance, pay 2% penalty

A Maharashtra Real Estate Appellate Tribunal order has directed a Mumbai developer to execute the conveyance deed in favour of the society, apportion the proceeds from the sale of commercial units in the project, and pay a 2% penalty. For a Mumbai buyer or investor, this is not a stray legal footnote. It is the appellate stage of a now-familiar pattern: homebuyers and societies pushing developers to complete the paperwork that actually transfers legal ownership, not just physical possession.

Conveyance is the step that moves the land and common areas from the developer's name to the cooperative housing society or apartment owners' association. Without it, a society cannot legally own the plot, cannot cleanly redevelop, and struggles to raise funds against its own property. The tribunal's direction to apportion proceeds from commercial units matters because in mixed-use Mumbai projects, income from shops and offices is often a disputed pool. Apportioning it gives the society a defined claim rather than a promise.

The 2% penalty is the tribunal's way of putting a cost on delay. Under the state's real estate law, developers are expected to complete conveyance within a set period after the occupancy certificate and the formation of the society. When that does not happen, the appellate route is increasingly where these matters end. The direction to execute conveyance is the substantive relief; the penalty is the nudge that makes compliance cheaper than further delay.

For buyers, the practical read is simple. If you are in a project where the society has been formed but the conveyance has not been executed, this order strengthens the society's hand. If you are buying resale in an older Mumbai building, a pending conveyance is a title risk you should price in, not ignore. And if you hold commercial units in a mixed-use project, the apportionment principle gives you a clearer line to the income you were always entitled to.

Sandeep's take: We have seen enough Mumbai projects where possession was handed over but the conveyance file gathered dust for years. Orders like this one change the arithmetic. They tell developers that the last mile of a project, the legal transfer, is not optional, and that societies now have a working remedy. For investors, a clean conveyance is becoming as important as a clean occupancy certificate. Treat it as a due-diligence item, not an afterthought.

What to watch next: Whether the developer complies within the timeline set by the tribunal, and whether more Mumbai societies use the appellate route to force conveyance and seek apportionment of commercial income in mixed-use projects.