Buying a residential property is a major investment for any homebuyer. Having to deal with a severely delayed or completely stalled housing project can be stressful, besides resulting in financial loss for a buyer. There is a significant number of delayed or stalled housing projects across many cities, which is impacting several homebuyers. In case of delayed projects, homebuyers have a few options if the insolvency proceedings have not already been initiated against the developer.
Approach the state RERA
In case of a delayed project, the foremost step a homebuyer can take is to file a complaint with the Real Estate (Regulation and Development) Authority (RERA) of the state where the project is located. Earlier, the lack of standard regulations resulted in litigation for years, further delaying possession dates. This has changed after the implementation of RERA across states.
According to RERA, homebuyers have the right to be compensated for the delays. They have the option to seek interest for every month of delay until possession at a rate prescribed under the RERA. The RERA also allows homebuyers to seek a complete refund of the amount paid for the property along with the interest.
As per the RERA laws, builders will face severe penalties ranging from registration cancellation of the project to imprisonment in case they fail to compensate the buyers for the delays.
Legal action outside the ambit of RERA
If a homebuyer is facing severe delays in getting possession of the property from the developer and wishes to take the legal route, they can approach a court or a hearing authority.
The Supreme Court has clarified that while Section 79 of RERA bars the jurisdiction of civil courts, the National Consumer Disputes Redressal Commission (NCDRC), a quasi-judicial commission established in 1988 under the Consumer Protection Act, 1986, is an authorised forum for aggrieved homebuyers to file a case against builders.
There are city-level forums across major cities in India. In every state, there is one state-level forum. These forums serve as consumer courts, where homebuyers can register a complaint against the developer and seek a refund in case the possession of the property has exceeded a year.
According to the law, homebuyers can approach the NCDRC in the following courts, depending on the value of the property:
- Properties worth up to Rs 20 lakh: Complaints must be filed with the District Commission
- Properties valued between Rs 20 lakh and Rs 1 crore: Grievances should be registered with the State Commission
- Claims exceeding Rs 1 crore: Homebuyers should approach the National Commission, which is at the central level.
Housing.com News Viewpoint
Buying a house is a major financial decision. In case of project delays, buyers face the risk of financial loss, including expenses involved in seeking legal support. Hence, it is important to stay vigilant and take immediate action when facing a delay in getting possession of a property. Contact the developer to get construction updates and understand the reasons for the delay. In case the developer refuses to disclose such details, it is important to approach the RERA.
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Harini is a content management professional with over 12 years of experience. She has contributed articles for various domains, including real estate, finance, health and travel insurance and e-governance. She has in-depth experience in writing well-researched articles on property trends, infrastructure, taxation, real estate projects and related topics. A Bachelor of Science with Honours in Physics, Harini prefers reading motivational books and keeping abreast of the latest developments in the real estate sector.
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