When the builder delays the possession, it results in harassment to the buyer, and the excitement of owning a new house is also lost. Besides, there are financial losses also.
Nowadays, the Government is coming up with pro buyer rules and regulations for tackling the problem of delay in possession. Even courts are taking stringent action against the builders who default.
Remedies available to the buyer are as follows:
Filling a complaint – A complaint can be filed by the buyer before
- civil court – A civil court may order for a refund of the amount already paid, compensation or completion of the project.
- consumer forum – awards compensation
- criminal complaint – a criminal case can be filed in a court for cheating or breach of trust
Authority set up under RERA – Real Estate (Development and Regulation Act, 2016). It is a new law under which the Government sets up a body known as Real Estate Regulatory Authority. A complaint can be filed before it. Buyer may hire a lawyer or himself fight his case before this Authority. A complaint is filed if the builder is not compensating the buyer. RERA is applicable only for larger projects where the area of land to be developed is more than 500 square meters.
Compensation: A buyer can seek compensation from the builder –
- Compensation as per the compensation clause in the agreement signed by both the parties – by sending a legal notice or filing a case in civil court
- Compensation – by filing a complaint in Consumer Forum
- Compensation under RERA – Buyer is given the right to withdraw from the project if the builder has not handed over the possession in time. Buyer can seek compensation for the entire payment made if he withdraws from the project. Otherwise, he has a right to be compensated for period of delay.
If the agreement for sale of the house contains an arbitration clause, the dispute is resolved through arbitration. The arbitrator may order compensation. The buyer will have to move the civil court for implementation of the award passed by arbitrator.
The buyer can choose Consumer Forum even if there is an Arbitration clause.
The agreement itself may provide for the penalty in default. The buyer can get the clause enforced.
What should be the duration of delay in possession?
Compensation can be granted even when there is a delay of one day.
Choice of remedy: The buyer can choose:
- At the first instance, send a legal notice. If the builder does not respond, an appropriate remedy can be availed.
- If a Regulatory Authority is set up in a state by the Government under RERA, a buyer cannot seek remedy in a civil court in that area.
- If no Regulatory Authority under RERA has been set up by the Government for a State, the buyer can approach civil court.
- A buyer can also approach consumer forum for redressal of his grievance as he is a consumer and services provided by buyer are deficient.
- A criminal complaint can be filed depending upon the facts of the case. In a criminal complaint, the builder is punished if found guilty, but the grant of compensation is the discretion of the court.
Also Read: Issues with property developers
Generally, the law does not permit availing more than one remedy at the same time. A buyer can approach consumer forum and RERA both, but he has to make a choice. One can withdraw his case from Consumer Forum and file the same before RERA as it a special law enacted for the protection of home buyers.
Consumer Forum and RERA can award compensation and impose penalty also. RERA can impose more stringent penalty.