Action Against Builder for Delayed possession

Most of the people are apprehensive before investing in a proposed real estate project or an under-construction project due to the fear of delayed possession or false promises. With the introduction of the Indian property law RERA (Real Estate Regulatory Act 2016) buying a dream house has become easier. It has brought regulatory standardization to real estate sector and has safeguarded the interests of the buyers. Now, if a real estate developer causes undue delay in handling over the possession of any property you have invested, you can register your complaints or even file a case against the builder under the RERA 2016.

What is delayed possession?

A builder-buyer agreement is signed by the seller whenever a person invests in an immovable property. This agreement stipulates a certain date on which the possession of the property shall be handed over to its buyer.
But every now and then, it has been observed that some cunning builders do not give possession of the property on mentioned time because of malpractices like shortage of funds or financial hiccups. Builders sometimes even alter the plans/ designs of the property without the consent or knowledge of the buyer.
If there is some genuine reason for delay in completion, the builder can ask for a limited time period extension. If the residential property is not delivered to the buyer even after the extension period, it accounts to delay in possession of the property. The liability is accounted only when the delay is caused due to his/her fault.  In case of natural calamity or any situation beyond human control, then buyer isn’t liable to take action against the builder.

Actions buyer can take in case of delayed possession

With the introduction of the RERA (Real Estate Regulatory Act, 2016) some stringent provisions and laws have came up to assist property buyers and discipline real estate developers. RERA ensures there is transparency in all the property transactions. The developers must provide all the information concerning their projects- from its foundation till its completion on the RERA information portal.

  • The Real Estate Regulatory Act (RERA) has also authorized the Consumer Dispute Redressal Commission at different levels to address the complaints of property buyers on the basis of the value of property or amount of damage or suffering provided that the property is for the personal and not commercial use.
  • The District Commission will handle disputes involving properties up to the value of 20 lakhs of Indian rupees. The State Commission will handle properties valued more than twenty lakhs of Indian rupees while the National Commission will handle properties with estimated value of more than one crore Indian rupees.
  • To prevent buyers from the exploitation of real estate developers, RERA mandates them to register on their website and share all the pertinent information in relation to the work-in-progress of the project. This empowers the buyer to claim the interest on the payment made to developer till last date in case of any delay. Through this the buyer is also entitled to claim compensation for damages suffered by him due to deficiency in service. In some states according to RERA, the builder is liable to refund the funds invested by the property buyer along with interest if in case he couldn’t justify the delay of possession of the housing project.
  • Under the Domestic Building Contracts Act, 1955, the property buyer is legally entitled to take strict action against the builder or developers for delays caused by them if they have included any warranties pertaining to completion of projects in the signed contract. Also, as per the Consumer Protection Act 1986, a buyer can file a complaint against the builder stating “deficiency in service” in case of delayed possession.
  • The buyer can also file a regular suit before a court of competent jurisdiction, for damages or specific performance, under the Indian Contract Act, 1872. In case there is a chance of fraud or cheating involved where the builder knew from the commencement that he would not be able to deliver possession within the stipulated time, civil and criminal proceedings can be initiated.
  • Depending on the severity faced by the plaintiff or the petitioner due to delay in possession of the property, the regulatory authorities or the courts of competent jurisdiction (where the complaint is filed) can decide the penalties to be paid by builders.
  • Apart from RERA, the Domestic Building Contracts Act, 1995 also aims to protect the interests of property buyers from fraud developers or delayed possession. It helps in ensuring that the plan of the property is approved by the buyer and the material used for construction is of premium quality.

Contact India Law Offices