WBRERA stops home buyers’ eviction due to promoter’s loan default

Kolkata: The Real Estate Appellate Tribunal has recently upheld a stay order of the West Bengal Real Estate Regulatory Authority (WBRERA) which sought to protect the home buyers from eviction if the promoter fails to repay bank loans.

The WBRERA has announced that such a situation has been faced by residents of a number of housing projects where the promoter had borrowed more than Rs 300 crore but failed to repay the loan in time. Generally in such cases, the banks auction the flats to recover the loan under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.

In one case, the promoter said nothing about an unpaid bank loan while handing over the flats, leaving the homebuyers shocked that their dream homes bought with hard earned money were to be taken away for no fault of theirs.

WBRERA informed that they were approached by the aggrieved homebuyers and more than 100 such complaints were submitted. “We gave an urgent hearing to all the parties concerned, following which WBRERA issued a stay order on all further actions of the bank in question. Since the bank had financed the project, and the promoters had assigned their rights to the bank by mortgaging the flats, it was held that the bank was also to be treated as a promoter.

It was also held that the provisions of the RERA Act (2016) would override the SARFAESI Act, in line with relevant judgments of the Hon’ble Supreme Court and High Court in this regard,” their statement read.

The WBRERA order was challenged before the Real Estate Appellate Tribunal which upheld the stay order. “This was a landmark order by WBRERA to safeguard the rights and interests of bonafide homebuyers who were protected from being ousted from homes for which they had duly paid the promoter,” the statement read.