Remedies For Buyers in Case of Delayed Possession Under RERA

The real estate sector in India suffered from malaise for a prolonged period. Delay in possession of property has been one of the biggest cause of heartache and heart burn for the consumers in spite of paying almost 90% for their homes to the builders. The distress caused by such delay, sometimes going up to 6-7 years, is unimaginable. It is major risk to one’s life-time savings and threatens his dream of becoming a landlord. In the wake of such hardships faced by the home-buyers and to regulate the real estate sector, the REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016, came into being, providing a sector-specific forum.

The Act established the Real Estate Regulatory Authority as an adjudicating mechanism for prompt dispute redressal and also the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority, having jurisdiction over all real estate matters. The complaints under RERA can be filed for any claim amount except where the occupancy certificate has already been granted to the promoter with respect to the real estate project.

Delayed Possession

Section 18 of RERA comes into play when possession is delayed on the part of the promoter giving consumer the options of:

  • Terminating the agreement and seek for refund, in case of which the promoter shall be liable to return the entire amount paid by the consumer with interest ; or
  • Continuing with the real estate project and assert compensation from the builder for every month of delay till the possession of property.

The rate of interest to be payable by the promoter and format of such complaint are prescribed under the RERA Rules being different in different States.

If the promoter delays possession of real estate project, complaint against him can be filed under section 31 of the RERA which states that any aggrieved person may file a complaint with the Regulatory Authority for any violations of the said Act. It can be filed home-buyer as well as Association of Allottees.

RERA Hearing

As per section 71, compensation claim filed by the consumer under Section 31 shall be argued before the Adjudicating Officer of RERA having the rank of a District Judge who is enjoined to hear and decide within a 60 day period following the Rules of Natural Justice. Time bound inquiry and order is a boon for consumers providing them with a speedy remedy.

Further, the adjudicating officer shall have the power to summon and enforce the attendance of any person acquainted with the facts and circumstances of the case to give evidence or to produce any document which may be useful for or relevant to  the subject matter of the inquiry.

The adjudicating officer may direct to pay such compensation or interest, as the case any be, as he thinks fit in accordance with the provisions of the Act.

Section 72 prescribes that the adjudicating officer shall have due regard to the following factors, when deciding the quantum of compensation or interest:—

  • the amount of disproportionate gain or unfair advantage as a result of the default;
  • the amount of loss caused as a result of the default;
  • the repetitive nature of the default;
  • other factors considered necessary in furtherance of justice.

Any person aggrieved by any direction or decision or order made by the Authority or adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal having jurisdiction over the matter.

However, a promoter’s appeal shall not be entertained, without him having first deposit at least thirty per cent of the penalty, or such higher percentage as may be determined by the Appellate Tribunal, or the total amount to be paid to the allottee including interest and compensation imposed on the promoter.

The appeal shall be preferred within a period of 60 days from the date on which a copy of the direction or order or decision made by the Authority or the adjudicating officer is received by the aggrieved party. The Tribunal may entertain any appeal after the expiry of sixty days if it is satisfied that there was sufficient cause for not filling it within that period.

The Appellate Tribunal has been empowered by the Act to pass interim orders as well and mandated to dispose of the appeal within a period of sixty days from the date of receipt of appeal. Nonetheless, the period can be extended for reasons to be recorded in writing.

RERA and Consumer forum

Pre RERA, the disputes between builders and home buyers were dragged for years before the consumer courts. The RERA has palpable benefits over consumer forums that can be understood in the terms of ease of filing complaints with the RERA which has jurisdiction by way of situation of property as opposed to the consumer courts which have a pecuniary limitation. Moreover, RERA has the power to investigate a matter and issue notice on its own motion as also to imprison the errant promoter which the consumer courts clearly lack.

To conclude, RERA has brought timely disposal of real estate matters at the door steps of the consumer. Despite of myriad challenges faced by the legislation, it offers speedy remedial regulatory and adjudicatory provisions to benefit the home-buyers.

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