A property buyer, who invests his hard-earned money in buying a home and does not get its possession on time, not only fails to get a roof over his/her head but also ends up losing money, in the form of EMIs on the home loan and paying for a rented accommodation. Moreover, the buyer may also have to wage a long and tedious legal battle to get the justice.
If possession is not delivered on time, a purchaser can send a notice to the builder, claiming the refund of the amounts paid along with interest and/or damages. “The buyer can also file a consumer complaint for ‘deficiency in service’ as defined under the Consumer Protection Act, 1986 against the builder,” suggests Ameet Hariani, managing partner, Hariani & Co.
“The flat purchaser is required to file a written complaint before the appropriate consumer dispute redressal forum set up under the act, depending on the value of the property, or the amount of damage he has suffered. Any dispute over Rs 20 lakhs can be directly filed before the State Commission and any dispute over Rs 1 crore can be filed before the National Commission in New Delhi. Any dispute for a value lower than Rs 20 lakhs has to be filed in the District Commission,” Hariani explains.
Recently, Unitech was penalised Rs 3 crore by the National Consumer Dispute Redressal Commission, for delay in giving possession of its flats. In another case, in Greater Noida, more than 300 flat buyers staged a protest against a builder, for delay in giving possession. A few months ago, a developer in Mumbai was asked to compensate buyers for delay in possession.
Experts point out that a purchaser can also file a regular suit before a court of competent jurisdiction, for damages or specific performance, under the Indian Contract Act, 1872. If there is fraud involved–for example, if the builder knew from the beginning that he would not be able to deliver possession within the stipulated time and by some misrepresentation, induced the purchaser to book the flat – civil and criminal proceedings can be initiated.
Type of damage and relief the complainant can get through legal course
According to Hariani, the purchaser/ complainant can get inter alia the following reliefs:
- Claim the money required to buy alternate accommodation at the ongoing market value in the respective area. The purchaser can also claim the money given to the builder.
- Claim interest on the payment made till date.
- If the purchaser/ complainant is buying the property for personal use, he can file a complaint seeking relief in the Consumer Dispute Redressal Commission.
- If the purchaser/ complainant is sure to get possession of the flat in a few months or years, he can claim compensation for the money that he will spend as rent on an alternate accommodation. This will be applicable if he is a first-time home purchaser, or if his building is being redeveloped.
- The purchaser can claim damages for loss of opportunity caused to the purchaser, had he invested his money elsewhere.
Before signing any contract, buyers should read all the points, including the disclaimers and check the builder’ financial credibility.