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It is a difficult situation when the consumer has to wait to get the keys of a dream home that has put in their hard earned life-long savings to buy a roof over their head post retirement. The long delay in construction, delivery and false promises made by society/ building developers are a few problems that the present real estate consumers are facing today. Most of them don’t know how to deal with such scenario.
In order to advise such home buyers on how to face the defaults of the builders, Mudrahome with the help of High Court Civil Lawyer sums up the topic with the following article on how to deal if the developer defaults?”
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“Delayed project delivery has become quite common in our country. However, developers include a grace period of generally six months, in their agreement with buyers but most home buyers accept a delay of 6-12 months as granted. Sometimes, possessions are delayed even beyond the expected tenure. In this case, a consumer can claim delay-in-possession charges from the builder,”
A legal notice can be given to the builder, in case the developer refuses to pay the delay-in-possession charges. As per the Supreme Court, a consumer held the right to approach the Civil Court or the Forum under the Consumer Protection Act to ask for relief in such situation where the builder commits and breach his obligations. There are laws under which the case can be filed before a Civil Court for damages for refund of amount and interest on the said amount.”
Before you think of filing a complaint against the developer, it is advised to consult a lawyer first and then send a legal notice to the builder through the court. Once the legal notice is given, one must carefully present your complaint and file before the Consumer Forum.
Can a home buyer get the money back along with compensation, if the builder defaults on his loan amount?
“Refunds due to cancellation of the deal or inconvenience of paying more can be claimed if a project is delayed beyond the stipulated time mentioned in the agreement. The Consumer can file a case in the Consumer Disputes Redressal Commission at the district, state and national levels.
In cases where the builder might ask the consumer to pay the holding charges until the registration formalities are not completed within the decided time, what should the home buyer do?
In this situation, our lawyer says that, “If it’s not mentioned in the agreement, the builder cannot force you. The consumer can also file a complaint before the Competition Commission of India, if the consumer can prove that the builder holds a dominant entity in the market, misusing his position and can harm the consumer by unilaterally imposing exorbitant hidden charges.”
Even if the project is completed and the developer asks you to take the possession, our team says, it will be wise to check the Completion Certificates (CC) given by the Municipal Authorities. “However, the certificate is sometimes withheld to penalize the builder/developer for not fulfilling the desired norms but it ultimately affects the flat owners. In many cases when the consumer is not aware of the documents to be checked, builders/developers elope once the flat is sold and the owners face the music afterwards because it is difficult for them to resell or mortgage the property without the proper documentation.
The CC documents include the location and land identification of the building, certificate that states that the building is constructed as per the building standards. For example distance from the road, distance from adjacent buildings, height of the building and other approved norms of the municipal authority as well as the building plan.
To advise those consumers who have invested their money directly through the special schemes given by the government to buy home and have not taken home loan, our esteem lawyer says, “The disbursal of the home loan amount should be linked to the stages of construction of the building, so that the money sanctioned by the bank does not get blocked in case of any dispute between the buyer and the developer. Such schemes are floated by the developers only to attract more buyers as sometimes they find it difficult to raise funds.”
He says that it is also important to become wiser and check all the legal papers of the developer. A thorough title search of the property should be done. The buyer should also check all the chain documents of the property and plan sanction approvals accordingly.
‘To scrutinize you can also engage a lawyer to conduct proper searches in the registrar’s office and the courts. For a valid ownership, a registered sale also needs to be executed. Due to the absence of this important document, you will not be entitled with the valid title of the property. You should consult a lawyer who is familiar with the recent changes of the government notifications in your area.
