What To Do If Your Property Possession Has Been Delayed?

What To Do If Your Property Possession Has Been Delayed

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.  

Also Read: Does Consumer Has The Right To Damages And Recovery If Possession Is Delayed?

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.

Also Read: Delay in Possession of Property by the Developers

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.

Arbitration:

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.

Other remedies:

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.

Delay in Possession of Property by the Developers

Delay in Possession of Property by the Developers

The Indian Government has been taking several steps such as Demonetization, RERA, GST, etc. to create a transparent and corruption free economy.

The Real Estate Regulation Act has been implemented to protect buyers and increase the investment in the real estate sector. The realty sector is a major contributor to the GDP of the country and the fall in the investment has affected country’s growth a lot.

The delay in possession of the property by the developers reduces their credibility in the eyes of the buyers. It also causes harassment and forces consumers to take action against them like filing a case, reducing the investment, etc.

The case of a harassed consumer:

In a recent case that we came across, Mr. Kunal had approached us to tackle the situation in which he had not been given the possession of his property till July 2017, even though he was promised that it would be handed over to him by July 2013.

He approached us with queries about provisions under RERA to protect his interest as a buyer and wanted to be aware of what action he could take against the developer.

RERA is an act that has been laid down by the government after observing the rising rate of buyer-developer disputes.

Provisions to protect the interest of the buyers under RERA

  • The developers are required to register their project with the State’s Real Estate Regulatory Authority so as to increase their credibility.
  • 70% of the amount is to be deposited in a separate account and is to be used only for the construction purposes ensuring timely delivery and any deviation will be punishable.
  • All the approvals have to be taken before initiation of the project to ensure timely delivery.
  • The buyer will only pay for carpet area, not for the super built-up area.
  • As for the delay in possession, the buyer has the right to claim an interest of 10.9% per annum.

Legal Action against the Builder for Delay in Possession of Property

The buyer can:

  • Issue a legal notice to the developer and demand for refund of the sum paid along with interest.
  • File a case in the Consumer court against any negligence on the builder’s part. For property:

Over Rs. 1crore – with the National Consumer Forum

Between Rs. 20 lakh to Rs. 1 crore – with State Consumer Forum

Up to Rs. 20 lakh – with District Consumer Forum

  • File a case under Indian Contract Act for any damages or lack of action, if an agreement was signed.
  • File a criminal trial to claim misrepresentation and fraud.
  • Claim the amount that would be equivalent to the cost of the property that you would have acquired as an alternate due to the delay of possession of the property by the developer.