LEGAL REMEDIES FOR HOME BUYERS IN CASE OF DELAY IN POSSESSION BY THE BUILDER

The delay in possession of the property can be caused due to many problems. But one must be cautious while purchasing a property. The buyer must read the points and the disclaimers in the buyer builder agreement thoroughly. One must check the financial credibility of the builder too. Once an agreement is signed containing no favourable terms, it could leave no legal remedy in the buyer’ judicial process. So, the buyer must cat diligently before executing real estate contracts.

Delay in Possession may occur due to many reasons:

  • The buyer does not devote his time to possess the property and over the paper works.
  • The seller is at delaying the process further and not doing the paperwork even after full payment.
  • The seller denies possession over the property and threatens the buyer.

1. Approach Consumer Forum-This is the most common forum to bring an action against the builder for deficiency in services under the agreement between the homebuyer and the builder. The home buyer is covered under the definition of “consumer” as defined in Consumer Protection Act, 1986 only if the house is purchased for his own use and not for any commercial purpose. Deficiency in services includes a delay in possession. This is a cost-effective manner as the court fee charges are very nominal.

There is a three-tier machinery for redressal of consumer grievances under the Act. The District Commission is the initial forum and has jurisdiction to entertain complaints where the value of the house and the compensation if any, claimed does not exceed Rs. 1 Crore. Where the value of the house and the compensation if any claimed exceeds Rs. 1 Crore but does not exceed Rs 10 Crore, the complaints will be entertained by State Consumer Commission which is established in each state. If the value of the house and the compensation if any claimed exceeds Rs 10 Crore, the National Commission Disputes Redressal Commission will have the jurisdiction to entertain such complaints.

You can file a consumer complaint either where the registered/ branch office of the builder is located or where the flat you purchased from the builder is situated.

2. File a case before the Regulatory Forum-You can also file a complaint with the Real Estate Regulatory Authority under section 31 of the Real Estate (Regulation and Development) Act, 2016. This authority is specifically constituted for speedy and effective adjudication of buyer-builder disputes. Under RERA if the builder fails to give possession as per the terms of the agreement for sale, then the buyer if he wishes to withdraw from the project, he can withdraw and is entitled to receive the amount paid so far and along with the interest.

3. File a Civil Suit-If the builder fails to deliver the property on the date as stipulated in the agreement then you can file a civil suit as there is a breach of obligations as per the agreement. You can approach a civil court and file a suit for injunction/damages or claim a refund of the amount paid to purchase the flat and interest thereof. If you approach the civil court, you can get an immediate order for an injunction under Order 39 Rule 1, and Rule 2 of the Code of Civil Procedure. However, there is no stringent timeline for adjudication of the suit and hence it may take longer as compared to other alternatives. In case, you are not a consumer, for instance, if you have bought flats for reselling purposes then you are not covered within the ambit of “consumer” and hence you can opt for filing a civil suit.

4. Initiate out of Court settlement –You can also opt for arbitration if there is an “Arbitration clause” in the builder-buyer agreement. Usually, it takes 3-6 months for resolving a matter through arbitration. There is no trial under this alternative and no evidence is considered while passing the award. In a recent judgment, NCDRC has held that even when there is an “arbitration clause” in the builder-buyer agreement.

5. File a Criminal complaint-If your builder has cheated or defrauded you then you can file a criminal complaint under the provisions of the Indian Penal Code for cheating, etc. A bailable warrant can be issued against the builder if you opt to file a criminal complaint.

Delayed Possession

Section 18 of RERA comes into play when possession is delayed on the part of the promoter giving consumer the options of:

  • Terminating the agreement and seek for refund, in case of which the promoter shall be liable to return the entire amount paid by the consumer with interest; or
  • Continuing with the real estate project and assert compensation from the builder for every month of delay till the possession of property.

The rate of interest to be payable by the promoter and format of such complaint are prescribed under the RERA Rules being different in different States.

If the promoter delays possession of real estate project, complaint against them can be filed under Section 31 of the Act which states that any aggrieved person may file a complaint with the Regulatory Authority for any violations of the said Act. It can be filed home-buyer as well as Association of Allottees.

Enforcement of Order:

In case the builder fails to enforce the order passed by the RERA Authority in favor of the home buyer, the home buyer can file an application for the execution of the RERA order against the builder with the same RERA Authority.

If the builder has failed to perform their duties and delayed in the construction and the possession of the property, then one can claim for the following reliefs-

  • Ask for the sum required to buy an alternate accommodation at the current market price in the same area.
  • Claim the money that was given to the builder with the interest on the payment/amount given.
  • Due to the delay in construction, one claim compensation for the money that you are going to spend as rent on any alternate accommodation.
  • Damages can be claimed for the loss of opportunity caused, because the same money could have been invested elsewhere.


RERA Hearing

As per Section 71 of the Act, compensation claim filed by the consumer under Section 31 of the Act must be argued before the Adjudicating Officer of RERA having the rank of a District Judge who is enjoined to hear and decide within a 60 day period following the Rules of Natural Justice. Time bound inquiry and order is a boon for consumers providing them with a speedy remedy.

Further, the adjudicating officer has the power to summon and enforce the attendance of any person acquainted with the facts and circumstances of the case to give evidence or to produce any document which may be useful for or relevant to the subject matter of the inquiry.

The adjudicating officer can direct to pay the calculated compensation or interest, as the case may be, as they deem fit in accordance with the provisions of the Act.

Section 72 of the Act prescribes that the adjudicating officer must have due regard to the following factors, when deciding the quantum of compensation or interest:—

  • the amount of disproportionate gain or unfair advantage as a result of the default;
  • the amount of loss caused as a result of the default;
  • the repetitive nature of the default;
  • other factors considered necessary in furtherance of justice.

Any person aggrieved by any direction or decision or order made by the Authority or adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal having jurisdiction over the matter.

REFERENCES:

https://lawrato.com/indian-kanoon/property-law/legal-remedies-available-to-a-home-buyer-in-case-builder-delays-in-delivering-the-possession-1221#:~:text=Under%20RERA%20if%20the%20builder,and%20along%20with%20the%20interest.

https://www.legalserviceindia.com/legal/article-5354-what-to-do-when-a-builder-delays-possession-of-property.html

https://www.indialawoffices.com/legal-articles/remedies-buyers-case-delayed-possession-under-rera

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