There are several abandoned and derelict under-construction projects in Mumbai, Navi Mumbai and Thane. For instance, in October 2009, Ajay Singh (name changed on request) invested in a 3-BHK, of a 16-storeyed under-construction project in Mumbai. He was promised possession in August 2010. It is 2015 now, and there aren’t any signs of his house getting ready. The project started in 2007 as a partnership between two developers. One of the two parties, gave power of attorney (POA) to the other in order to run the project.
“The problem arose when the partner violated the POA and approached the municipal body for additional FSI of four floors, without the knowledge of the other, who was in turn, notified by the municipal body,” informs Singh. “As a result, the project construction completely stopped from December 2010, for the next two years.” Affected by this, Singh along with other buyers, formed a forum in January 2011. They approached the court at Alibaugh (later, the case was moved to the Mumbai High Court) which has ordered the developers to give possession by October 15, 2015. If not done, the victims can approach the court again for contempt of court against the builders.
See also: No service tax on purchase of under-construction flats: Delhi HC
Till date, the affected residents have spent approximately Rs 17 lakhs in legal fees. If the forum had not moved court, the project would never have seen the light of the day. What happened to Singh can happen to anyone. One has to be very careful while investing in a property in an under-construction project. An investor must “Check if the project has been given pre-approvals by the bank and has an APF number. Construction approvals like Commencement Certificate (CC), Intimation of Disapproval (IOD), environmental clearance and floor plan approval, should be in place along with a clear land title,” points out Kaizad Hateria, general manager, Corporate Customer Relations and Asset Class Specialist, Rustomjee.
He further elaborates that “While most agreements allow room for delay in delivery of the project, due to non-anticipated factors, the buyer has recourse under the agreement in case of a prolonged delay, in which monetary compensation is sought,” says Hateria. “Moreover, if the buyer is not reassured of the reasons of delay, he can take legal recourse or approach the consumer court” he states.
According to advocate Narendra Vishnu Sankpal, RV Sankpal & Associates, “The only remedy is to file an application before the consumer forum for reliefs, as there is a defined relationship between buyer and seller under the Consumer Protection Act.” He explains how “Once the case is filed before the consumer forum, based on merit, it will issue an order against the developer to complete the work and give possession to buyers, within a specific timeframe. If he fails to do so, he is liable for execution proceedings under the criminal procedure code. If the developer doesn’t follow the order, then a complaint can be filed against developer, but the procedure will take time.”
Legal course a victim can take: |
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With 16+ years of experience in various sectors, of which more than ten years in real estate, Anuradha Ramamirtham excels in tracking property trends and simplifying housing-related topics such as Rera, housing lottery, etc. Her diverse background includes roles at Times Property, Tech Target India, Indiantelevision.com and ITNation. Anuradha holds a PG Diploma degree in Journalism from KC College and has done BSc (IT) from SIES. In her leisure time, she enjoys singing and travelling.
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