Undoubtedly, one of the most stressful things is to buy a property which is under construction, and the possession procedure is totally uncertain. Although builders often make high claims about the initial grant of occupancy, and often sample houses are ready to tempt you to a certain amount of promise, the wait is often long and tiresome. Until the passing of the Real Estate Regulation Act, 2017, there was no specific rules and regulation for punishing the developers for late delivery of property. But at present, you can sue your developer for late delivery of the property and claim the necessary compensation. Here we are going to discuss a few important points that will guide you in your suit for the delay in possession:
Check what your contract says about it:
Most property contracts provide an accurate time period of completion of work. Please read your agreement thoroughly to find out the duration. You also need to be aware of clever clauses that builders include them in the contract. Due to the recent RERA provisions, all property selling contracts must specify the delivery date of possession of the property.
Payment of compensation as per RERA rules:
If the late delivery caused by the builder without any justification, that is not considered appropriate by the court, as a buyer you can expect to receive compensation up to 10% of the value of the property according to the RERA rules.
Refund of money deposited & Cost of Litigation:
In a number of cases where construction has not begun or is still in its primary stage, the court offers full refunds to the buyers to invest their amount in purchasing other properties. Furthermore, under RERA act, builders are bound to keep the money into a special account which is received from buyers and that makes the process more efficient, and this money cannot be used for any other purpose. It can also order builders to pay the full costs of litigation charge when the court is satisfied that the buyer’s complaint is genuine.
Punishment to the builders:
In case of late delivery, the builder may lose his registration for the project, and besides that, he may also face up to three years imprisonment or a fine which may extend up to ten per cent of the estimated total project value, or both.
A buyer who is a victim of a builder’s misconduct may contact the following forum for redressal:
- The buyer can file a case in civil court against the builder
- He or she can lodge a complaint in consumer forum
- A buyer can submit a complaint before the Competition Commission of India
- A buyer can approach the regulatory forum
- A buyer can file a criminal case against the builder
“M/S Pushpa Builders Flat Buyers … vs M/S Pushpa Builders Ltd. on 11 September 2001 National Consumer Disputes Redressal”
“In this case, two separate complaints have been filed by M/s. Pushpa Builders Flat Buyer’s Association mentioning the deficiency in service on the part of M/s. Pushpa Builders Ltd. (Respondents). In this case, the facts are that the Complainants in both cases responded to the advertisement applied for purchase of flats in 1988 to 1989 in two complexes, Pushpa Akash and Pushpa Vaishali which has to be built up by the respondents in Vaishali area of G.D.A in Ghaziabad. These flats were to be built up in free-hold and lease-hold lands and according to the Brochure on record, the flats were to be completed by December 1991. And when the Complainants found that the flats were nowhere in sight, they delayed the payment of instalments and work came to a standstill. As a result of all these, 10 Complainants filed a complaint before the commission in 1994 (O.P. 60/94). Then the commission passed an order in June 1996 saying that the respondents to refund the amount deposited by those 10 Complainants along with 18% interest. In an appeal, the order of this commission was maintained by the Hon’ble Supreme Court. It is also seen that there were five more flat buyers applied to be included in the complaint No. 60/94 but the commission refused them and order was passed in respect of 10 Complainants.
Since complainants in both the complaints before us in OP 215/96 and 326/2000 are being represented through the same Complainant’s Association, Respondents are the same and cause of action is the same, we are inclined to pass one single order in the two complaints filed before us.”
It is concluded from the above case that the M/s. Pushpa Builders Flat Buyer’s Association had filed two complaints specifying that there was a deficiency in service i.e. the plaintiff found no flats in the sight which has to be completed by December 1991. So, the plaintiff delayed in payments of instalments and work came to standstill. Then the commission ordered to refund the amount along with interest to the plaintiff. If there are unfair practices of the builders or developers then we can bring legal action against them to recover the damage.
Today, increasing demand for residential and commercial property has given birth to a number of unprofessional builders and developers who are offering specialized features to attract potential buyers. It has also created a battle between buyers and builders to indulge in unfair practices and delay in delivering property to buyers, in which ultimately the buyers are suffering mentally as well as financially. By using these remedies provided by the law, the buyers can get their money back with interest or get possession of the property along with financial compensation.