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.

Landmark Judgement by consumer court against property builder

Judgement against builder for delayed possession flat

Atul Kinra, husband of the complainant, entered into a contract for the purchase of a plot measuring 300 sq. yards with the Respondent and paid a substantial amount for it. However, later the Respondents have failed to transfer the said plot provisionally allotted another plot and Atul Kinra paid Rs. 38,77854 of Rs. 40,50,354 and the leftover amount was discounted for the reason of timely payment. The respondent in the plot buyers agreements (20.06.2007) promised to transfer the property by two years but not later than 3 years (19.06.2010). But even after 5 years, the husband of the complainant could not find much development has taken place.

Atul Kinra was later offered another plot which was accepted by him and the necessary changes were made in the Plot Buyers Agreement. The plot was allotted only on paper and no physical possession was transferred. The Respondent had also failed to take the permission from the requisite authorities. Atul Kinra also paid the requisite fee to transfer the re-allotted property to his wife. Neeraj Kinra on 07.08.15 . Neither was the Respondent ready to transfer the possession nor to Refund the original amount.

The complainant filed the present Complaint before the State Commission, U.T. Chandigarh asking for Refund along with interest and compensation.

compensation, in the sum of Rs.3,00,000/- for causing mental agony and harassment

The Respondent challenged the said complaint on the following grounds:

  • Complainant is not a Consumer as the plot was transferred to her by her husband and wan not an original party to the Contract.
  • Time is not the Essence of contract in the present case.
  • As the Respondents were ready to transfer the plot therefore if the refund is claimed the forfeiture clause would be applicable.
  • No jurisdiction of the Commission on the ground of existence of Arbitration Clause.

The Commission rejected the aforesaid pleas on the ground:

  • Complainant is the Consumer as the requisite fee was paid and title of the Complainant was accepted.
  • The Plot Buyers Agreement expressly provided the maximum period of 3 years which made time to be the essence for the expressly of the said deed.
  • As the possession was offered too late, therefore, the Complainant was not bound to accept it and was required to be paid the interest @15% for the reason that had it been invested in some other business, the Complainant could have earned the substantial amount of return. The Commission also ordered the payment of Compensation for the mental agony and harassment caused.
  • Existence of Arbitration Clause is no bar to filing the Complaint in the Consumer Forum.

Read Full Judgement


Click here to download full Judgement