NCLAT rules homebuyers gain control over maintenance duties

The National Company Law Appellate Tribunal (NCLAT) has ruled that maintenance responsibilities for housing complexes must be transferred from developers to the owners' association once it is registered. This decision strengthens the rights of homebuyers, allowing them to manage their residential societies, even if the projects are incomplete. The ruling, made on March 18, came after a request from the Supernova Apartments Owners Association in Noida, Uttar Pradesh. The NCLAT stated that a real estate company cannot deny the transfer of maintenance duties to the legally registered association. Justice Ashok Bhushan led the bench that made this determination, emphasizing the law's requirement for such transfers. Supertech, the developer of the Supernova project, had signed a maintenance agreement with YG Estates Facilities Management in 2019. However, as the registered association formed in May 2023 sought control over maintenance, YG Estates resisted the move, leading the association to seek legal action. The NCLAT had previously ordered the transfer of maintenance duties in December 2024. When YG Estates refused to comply, the issue escalated to local authorities. The tribunal ruled that the owners' association has the right to take over maintenance and that YG Estates could not continue to handle it. The NCLAT also pointed out that the registration of the association was valid, dismissing claims that it was improperly registered. It confirmed that real estate companies undergoing insolvency cannot keep maintenance control through third parties. The tribunal noted that any outstanding financial issues should be addressed with the Interim Resolution Professional in charge of the developer’s finances.