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RERA Applicable Even To Long Term ‘Lease Agreements’ Which Are De facto Sale Deeds

The Bombay High Court in Lavasa Corporation Limited vs Jitendra Jagdish Tulsiani has held that that provisions of the Real Estate (Regulation and Development) Act, would apply in case of agreements styled as ‘Agreement to Lease’ when the lease period is long (say 999 years) and when the ‘lessee’ has paid a substantial amount as consideration, thereby dismissing second appeals filed against orders passed by the Maharashtra Real Estate Appellate Tribunal that held that though the ‘Agreements’ between the parties are titled as ‘Lease Agreements’, in effect, they are the agreements of “absolute sale” and, therefore, the provisions of the RERA will be applicable.

The High Court found that though the agreement has been termed as lease and RERA precludes from its ambit lease agreements and/or rented spaces, this agreement was for a period of 999 years, the rent charged is only Rs. 1/- per annum and the lessee has paid more than 80% of the consideration and decided the reading into the intent of the agreement it is clear that the said agreement is a sale deed and therefore RERA would be applicable.

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