M & Z Legal – Advocates & Solicitors
Introduction
Project transfers within a corporate group can complicate enforcement of allottee rights. A promoter may change the development entity, assign rights to a related company or place assets with an affiliate. Whether that restructuring alters statutory liability depends on the legal nature of the transfer, the identities of the promoters and the protections built into RERA.
Section 15 and project transfers
Section 15 regulates transfer or assignment of a promoter’s majority rights and liabilities in a real estate project to a third party. Subject to the statutory conditions, prior written consent of two-thirds of the allottees, excluding the promoter, and prior written approval of the Authority are required. The incoming promoter must comply with outstanding obligations; a transfer does not create a fresh automatic extension of the project timeline.
Corporate relationships are not enough
The fact that two companies have common shareholders or directors does not, by itself, make one liable for every debt of the other. Conversely, a formal corporate separation does not resolve whether the affiliate independently meets the statutory definition of promoter, made representations to purchasers, acquired development rights or assumed project obligations.
The evidentiary inquiry
Relevant documents include the original development agreement, registration disclosures, allotment agreements, board approvals, asset-transfer instruments, bank flows, communications to allottees and the regulatory approval record. An allegation of sham transfer or diversion of assets requires proof; it should not rest solely on the expression sister concern.
Available remedies
Depending on the facts, an allottee may seek regulatory directions against the registered promoter and any properly joined statutory promoter, challenge an unapproved transfer, pursue compensation for established loss or invoke other applicable civil remedies. Claims of fraud and corporate veil-piercing demand particular care and cannot be assumed from non-compliance alone.
Conclusion
The governing question is not whether a project moved within a group but whether the transfer complied with Section 15 and whether statutory obligations remain enforceable against the correct legal persons. Corporate restructuring is not, without more, a statutory escape route.
