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If you are facing a situation where the builder violates the purchase agreement in any manner, you can send a legal notice against the builder asking the compensation as desired. You can either send a legal notice to the builder for possession or else, you can send a legal notice to the builder for the refund of the amount which you had paid in advance to the builder at the time of signing the Agreement for sale. In India due to the constant growing urbanization, the demand for residential and commercial flats and buildings is increasing day by day.
Usually, the construction of a building gets started after signing agreements between the builder and the landowner. It’s creating a very highly profitable opportunity for builders and developers. But unfortunately, due to lack of strict laws and control, dishonest and greedy builders cheat and deprive general buyers who invest their hard-earned money or life savings with the hope of a permanent shelter. So if a builder fails in performing his duty properly and does not complete the construction on time, then it becomes necessary to send a legal notice to the builder for delay in construction.
In the last few years, the situation has changed. Both the Central and the State Government started putting a light in the field of real estate and taken several initiatives such as “Housing for All by 2022” launched by Prime Minister Narendra Modi. Implementation of stringent and effective laws such as Real Estate (Regulation and Development) Act, 2016 (RERA) and Consumer Protection Act, 1986(1) helped to improve the situation and regularize the conducts of the builders and developers.
“The RERA Act ïs a full proof regulation that aims to provide complete transparency and accountability to the home buyers in the real estate sector. It has empowered the home buyers by giving them an appropriate and trustworthy dispute redressal forum that can quickly resolve their real estate matters,” says Advocate Pawan Kumar Ray.
However, an important point to keep in mind is that a legal notice against the builder can be sent if the agreement is dishonored. Not only the buyers but also the landlord can send a legal notice to the builder.
Table of Content:
Steps for sending a Legal Notice against the Builders
Type of damage and relief you can claim against the Builders
When should you send a Legal Notice against the Builders?
How to Draft a Legal Notice against the builder for Refund or Financial Actions?
Steps to Draft a Legal Notice against the builders for Non-financial Actions
Legal notice Format against the Builders
(The lawyer should have a good knowledge regarding how to write a legal notice to the builder.)
STEP 1: Discuss with the lawyer the whole facts and supported by the agreement, brochure of the builder (if any available), money receipts or any other documents which can be used as proof of your payment.
(The notice can be sent either in English or in any other Indian language which is spoken and understood by the builder.)
STEP 2: In your consulting session with the lawyer, you should explain all the relevant information in details along with:
The name of the builder (if it’s a proprietorship firm) in case it’s a company the name of the company and the name of the Directors
Date of the agreement
STEP 3: Your lawyer carefully studies the information you have shared and makes the relevant and required notes. The lawyer then drafts the notice in a legal language where the following is mentioned.
The reason behind sending the notice.
All the previous communications regarding the cause of action.
Offer the addressee/opposite party a reasonable time (usually 15 to 30 days to settle the matter through negotiation and by performing the desired action to his clients i.e. yours)(Depending on the grievance, usually the lawyers, on behalf of the client sending the notice, stress on the need for an action to be taken in the stipulated period of time to either fulfill the demand or seek a reply)
STEP 4: The notice is duly signed by the lawyer. It is either sent via registered post or speed post or courier, and the acknowledgment is retained. A copy of the said notice is retained by the lawyer concerned.
STEP 5: The expectation is that after receiving the notice the builder will reply himself/herself or through their advocate, or take appropriate action. If that doesn’t happen, you can directly go to court against the builder without any further communication.
If the builder fails to deliver the possession or deprive you under any of the above-discussed circumstances you can claim the following relief
You can claim the sum required to buy alternate accommodation at the present market price in the project area
You can also claim the money given to the builder. Claim interest on the payment made till the realization of the same
If you are buying the property for personal use, you can file a complaint seeking relief in the Consumer Dispute Redressal Commission
If you are sure to get possession of the flat in a few months or years, you can claim compensation for the money that you will spend as rent on an alternate accommodation
You can claim damages for loss of opportunity caused to you, which you could invest elsewhere
There can be several cases where you need to send legal notice against the builder. Amongst them most of the important cases are as follows:
Not delivering the possession even after the due date of delivery
Not providing amenities and other facilities which the builder had promised in the terms of agreement for sale
Failed to complete the construction even after the promised due date
Using inferior quality construction material
Not registering the flat/unit in the name of the purchaser even after completion of full payment
Asking an amount higher than the amount in the agreement
Any other case where the builder fails to provide the expected service
You can draft legal notice to the builders for a refund of the amount which you had paid him at the time of booking of flat or signing of agreement along with interest and send forward.
A sample of legal notice to builders can be found here. A legal notice to builder must contain these essential points:
Name, description, and place of residence/office of the builder
Name, description, and place of residence of the sender of the notice
Details of the cause of action
The relief claimed by the sender of the notice
The gist of the legal basis for the relief claimed
The legal notice must be drafted in the letterhead of an Advocate
The legal notice should contain the name, address and contact details of the advocate
It should contain all the communication details of the sender, such as name, contact number, address, etc.
It should be clearly mentioned in the notice how your right has been infringed due to the builder or his men and agent and for that what relief you want from him
A specific direction in respect of the relief shouted by the sender must be given to the opposite party and time limit must be given
The notice must be signed with the date by the Advocate
Let us now look into the Legal Notice Format against the Builders. Though it is easy to draft a legal notice against the builder for delay in possession, however, legal precision is required to be maintained.
Such format is available here in pdf format, but it is advisable to consult a good lawyer.
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1. Consumer Protection Act, 1986 - A sitemap of the Consumer Protection Act, 1986
What happens if the builder delays possession?
You can claim compensation for delay in possession of flats even if the possession is delayed even by a day. There is no specific delay or waiting period to file a case against delay in possession of flat in a consumer court.
Under the RERA Act, what happens if the builder delays possession?
“The buyers can file a case and send a legal notice to their builders for delay in possession under the RERA Act 2016, or transfer their case from a CDRC to the State Real Estate Regulatory Authority and as per the Act, the builders will have to pay 10% interest on the value of the property for delayed possession of flats,” says Advocate Pawan Kumar Ray.
How many times can a builder delay closing?
By law, a builder is permitted two extensions of 120 days each, without having to pay delayed closing compensation, provided that the homeowner was given proper written notice. After the 240 days have elapsed, the builder must set a Delayed Closing Date and the homeowner is entitled to delayed closing compensation.
What happens if the builder is not registered in RERA?
If a builder fails to register his project with RERA, it is his fault. When buyers approach RERA for redressal of any grievance, they would be asked why they opted for an unregistered project.
Can a builder charge maintenance without completion certificate?
No, the said builder is not eligible to claim maintenance before the completion of the total facilities. He/she is required to complete everything before they can claim for maintenance charges. Also, you can file a complaint in the consumer forum for deficiency in services.