Steps to Follow if Builder Delays Possession
Nidhi Verma
Digital marketing & Proformance marketing and Affiliate Marketing, Media buying, Work on CPI, CPR and CPL model on world wide.
Investing in a group housing project is risk most people are forced to take, essentially in a standard group housing project, a developer generally promises to deliver flats in 3 years and includes a grace period of six months in the builder-buyer agreement. Therefore, there is a general assumption that the delivery time can extend to a maximum of three and a half years. However, in most group housing projects possession is delayed for a period as long as five years. The question that bothers most consumers is that whether the builder actually has no control over changing trends in delivery time. Well, not really. In a general trend, a multi-storey apartment building can be completed within a span of 2-2.5 years. But most builders, take their consumers for granted. Here are a few reasons why:
Dispute or Litigating pending on the property
There may be some case pending over the property due to which construction cannot be commenced or the construction is halted. It is also a possibility that the construction has been stayed due to failure in compliance with existing regulations.
- Approvals not Received
A lot of formalities and approvals are required by the developer in order to grant possession. The first one being the Construction permit, if the construction permit isn’t granted, the builder cannot start the construction. Also, even if the project construction has been completed but the Completion Certificate (CC)and the Occupancy Certificate (OC) are not granted, the possession cannot be delivered by the developer.
Financial Crises
Developers don’t use all the installment money received for a project to develop just that project. They use this money to invest in other property and start-up new projects. However, if there is a change in the market trends, then it leads to a situation of financial crises.
Labour or Material Shortage
Labour Resource shortage due to strikes or otherwise and raw material shortage is every developer’s nightmare. Although such a crisis is not usually or an extended period of time, it is used as a facade by the builders to hide their delays and shortcomings.
Developer Delaying Deliberately
In certain cases when the market value of a project has substantially increased, the builders deliberately delay the delivery of possession, hoping that buyer will panic and ask for a cancellation or refusal to make subsequent payments, which in turn will allow the builder to sell the property to someone else at a higher cost.
Force Majeure
A conceivable reason for the postponement can be force majeure for eg. political insecurity, riots, psychological oppressor assault, the cataclysmic event like surges and quake and so forth. Such occasions are not in the control of the manufacturer or the purchaser. Be that as it may, the likelihood of such an occasion is less.
Preventive Measures
Due Diligence
It is the most important cautionary measure for a consumer. Before investing a project, every consumer must check the past record of the developer. Then you should check whether the project has received all the necessary approvals. It is also advisable to invest in a construction linked project i.e. one where you pay your installments in accordance with the amount of work completed. This provides the builder with an incentive to complete the project faster and it provides the consumer with easy exit from the scheme if it isn’t working on the decided timeline.
Penalty Clause
Before handing over the down payment cheque it is necessary that you should check your agreement with the builder and ensure that it has a penalty clause in case of delay in possession. This clause ensures that the builder will pay you a decided sum of money for a period of which the project was to deliver till when the possession is granted.
Form a group
The voice of a group always has more impact than that of an individual. Find disgruntled home-buyers of the group a collaborate with them to put pressure on the Builders.
Follow up with Builder
It is imperative that you follow up with the builder regularly on the progress made in the project. Your duty does not end at simply paying installments, it is also important that you follow up with the builder.
Legal Recourse
If you wish to take a legal action against your builder then the following resource is available to you.
CIVIL COURT
If a developer fails to fulfill his commitments, the aggrieved party has the right to sue in a civil court. Certain instances where a party me approach the court would be if the developer has sold off a land which doesn’t belong to him the first place or if he has failed to take the necessary permits for the projector has used sub-standard quality of material for construction.
CONSUMER COURT
Consumer Protection Act, 1986, protects the rights of a consumer and provides remedies to a consumer against deficient services. A delay in handing over possession of flat is the deficiency in rendering of promised service by the builder. You can file a case with the consumer dispute redressal commission at three levels – district, state and national level. District commission, established in each district, can handle cases where the value of the claim is less than Rs. 20 lakhs. The State commission of every state can handle cases where the value of the claim is more than Rs. 20 lakhs but less than Rs. 1 Crore. The National commission has jurisdiction to handle claims of more than Rs. 1 Crore.
CRIMINAL COMPLAINT
Along with the consumer complaint in consumer forum, you can also file a criminal case against the builder under the provisions of Indian Penal Code, 1860 for breach of contract, cheating, not responding to grievance and delivery of poor quality construction. You can send a statutory notice to the builder. If the builder does not respond to the notice, file a police complaint and then file a criminal complaint before the Metropolitan Magistrate. You should mention all irregularities committed by the builder in your complaints.
RERA
RERA stands for Real Estate Regulatory Act, came into force on the 1st May 2016 with 52 of 92 sections notified. The main aim of this act is to address issues like delay in transfer of possession, the dispute over prices, quality of construction and the construction material etc. Delay in possessions is one of the most major issues faced by home buyers across India. There have been delays about 7 years in building projects in the past decade. The major reasons for these delays are, diversion of funds to other projects, changes in regulations by authorities, the environment ministry, national green tribunal etc. and other bodies like those involved in infrastructure development and governing transport. In many places, land acquisition becomes an issue. Builders often sell projects to investors without the approval of plans, unauthorized increase, bad quality of construction, projects stuck in litigation etc. This is where the provisions of RERA come into the role of a saviour.
COMPETITION COMMISSION OF INDIA
The Competition Act, 2002 was enacted to prevent practices having the adverse effect on competition, to prohibit the use of dominance and to protect interests of consumers. A flat buyer can file a complaint against the unfair practices of the builder before the Competition Commission of India which has been empowered to investigate anti-competitive practices and impose stringent penalties on the offenders. Penalties imposed by CCI against a builder act as a deterrent to unfair trade practices in the real estate industry.