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What to do when a Builder Delays Possession of Property?

Read our guide on what legal action to take and how to send legal notice to a builder for delay in possession of property.
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One of the worst feelings in the world is not getting your property from the builder on time. Imagine a dream house or office you’ve invested in with all your hard-earned money and have been waiting for its delivery, but the builder is causing a delay in possession!

More often than not, real estate developers and builders delay delivery of possession of the property by not just weeks or months, but by years. This not only results in the monetary loss but also adds to the mental agony of the buyer. Most buyers are not aware of the available legal action against the builder for causing a delay in possession.

When can you take legal action against a builder?

You can take legal action against the builder in the following cases:

  1. The builder has used substandard products or poor quality material to construct the project

  2. The builder does not have relevant permits by local authorities

  3. The builder has constructed the project on an illegally acquired land

  4. The builder has committed fraud in booking the project

  5. The builder changed land use, layout plan, and structures without approval

  6. The builder is charging hidden charges

  7. The builder has canceled the booking after receiving the booking amount

  8. The builder is causing a delay in delivery of possession

  9. The builder has created a third party interest in the flat allotted

  10. The builder is not providing a Completion Certificate 

What Legal Action can be taken against a Builder?

As a buyer, you can consult a property lawyer and follow any of the following legal remedies against delay in delivery of possession:

I. Send a Legal Notice: It is important to send a legal notice to the builder for delay in possession through the best property lawyers in India. If the builder fails to send a reply to the legal notice and does not resolve your grievance, you can file a case in the appropriate court against the builder.

II. File a Case in a Consumer Court under the Consumer Protection Act, 1986(1) with the help of a consumer court lawyer in India against the builder for ‘deficiency in service’, a term defined in the Act. The Act lays down which consumer dispute redressal forum the consumer can approach to file a consumer case depending upon either the amount of damage suffered or the value of the property. 

You can claim compensation for delay in possession of flats even if the possession is delayed 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, against the builder delaying possession of flat. Depending upon the property value and compensation claimed, you can file a case in the following consumer courts: 

  1. A complaint can be filed in a District Commission for claims up to Rs. 20 lakh

  2. A complaint can be filed with the State Commission for claims between Rs. 20 lakh to 1 Crore

  3. The National Commission can be approached for claims more than Rs. 1 Crore

III. Claim Refund of the Amount paid to the Builder: As a buyer, you can claim a refund for the property if the delay in possession is taking too long. Here, you can directly file a civil case in a civil court by hiring top property lawyers. Forgot to add a clause in the contract for default by the builder? There is no need to worry as the Consumer Court may be approached in such cases.

IV. Claim Interest: Various states have special provisions to protect the interests of the purchasers. For example, the Maharashtra Ownership Flat Act, 1963(2) states that the builder is liable to refund the money of the buyer with an interest rate of 9% if he cannot justify the delay in handing over possession of the property. 

V. File a Criminal Case: You can also file a criminal case against fraud committed by the builder in booking the property. You can approach the appropriate authority to take an action against the builder for delay in possession either individually, or file a class action as an association of aggrieved buyers.

What are the Property Laws relating to Delay in Possession?

One of the most beneficial Acts that have come into existence in recent times to protect buyers from exploitation is the Real Estate (Regulation and Development) Act, 2016(3). The Real Estate (Regulation and Development) Act, 2016 also establishes the State Real Estate Regulatory Authority in every state for redressal of grievances against a builder. A buyer can file a case and send legal notice to the builder for delay in possession under the RERA Act, 2016 or transfer their case from a CDRC to the State Real Estate Regulatory Authority. 

According to this Act, a builder will have to pay 10% interest on the value of the property for delayed possession of flats. RERA was enacted with the intention to prevent exploitation of buyers, safeguard their interests and provide stricter punishment for builders delaying possession of the property.

For more queries or confusion regarding the possession of the property in India, ask for expert legal advice from us now!

In addition to RERA, the Domestic Building Contracts Act, 1995(4) also aims to protect the interests of property buyers in case of delay in possession. Some of the provisions of this Act are:

  1. All work must be completed within the pre-decided time 

  2. All work that is to be carried out must be according to the plans approved by the buyer

  3. All material used in construction must be of premium quality and must be acceptable by the purchaser

  4. The work carried out must be in a legal manner with diligence and reasonable care

The exploitation of purchasers by builders delaying possession has existed for a long time now and it is only in recent times that the cases of delay in possession have reduced. The various property laws that aim to protect the interests of purchasers and punishing builders for delaying delivery of possession, are to be thanked!

Builders who caused a delay in possession can no longer exploit the purchasers as buyers have numerous remedies against the injustice done towards them. Is your builder delaying possession of your property too? Hire the top property lawyers near you, only at MyAdvo. Email us at info@myadvo.in or call us at +919811782573.

External Links:

[1] Consumer Protection Act, 1986 - The Consumer Protection Bill, 1986 seeks to provide for better protection of the interests of consumers and for the purpose, to make provision for the establishment of consumer councils and other authorities for the settlement of consumer disputes and for matter connected therewith.

[2] Maharashtra Ownership Flat Act, 1963 - Sitemap of Housing Act rules in Maharashtra.

[3] Real Estate (Regulation and Development) Act, 2016 - Sitemap of RERA Act (PDF) published by the Ministry of Law & Justice.

[4] Domestic Building Contracts Act, 1995 - Sitemap of Domestic Building Contracts Act, 1995 under the legislation of the Government of India.

 

FAQs:

Q1. What happens if builder delay possession Rera?

Answer: A buyer can file a case and send legal notice to the builder for delay in possession under the RERA Act, 2016 or transfer their case from a CDRC to the State Real Estate Regulatory Authority. According to this Act, a builder will have to pay 10% interest on the value of the property for delayed possession of flats.

Q2. What is the grace period in Rera?

Answer: Ideally, six months should be the maximum grace period, from the date of possession specified in the agreement. As per the Maharashtra Ownership of Flats Act, 1963 (MOFA), the exact date of possession should be disclosed in the agreement of sale.

Q3. What happens if Builder does not follow Rera order?

Answer: In case the builder fails to enforce the order passed by the RERA Authority in favour of the home buyer, the home buyer can file an application for the execution of RERA order against the builder with the same RERA Authority.

Q4. What is soft possession?

Answer: For you, an OC is called 'ready for possession'. But there is a new term called 'soft possession or fit-out possession' which means when the builder is ready to allow you to start woodwork. Now, that can be one year before the building received the OC and actually fit for you to occupy.

Q5. Where do I file a complaint against a builder?

Answer: It is necessary for a builder to be a CREDAI member for a complaint to be filed against him/her. CREDAI has established Consumer Grievance Redressal Forums where an affected buyer can register his complaint against the builder. You can file a complaint online, directly on their official website.

Reviewed by:
Prachi Darji
Associate - Legal, MyAdvo Techserve Pvt. Ltd.
Published on 20th Sep, 2019
15,292 views

Prachi Darji is an expert corporate lawyer, currently associated with MyAdvo as an in-house legal advisor. She has finished B.Sc, LLB(Hons.) from Gujarat National Law University. She has an expertise in various domains of law including Intellectual Property Law, Company law, etc. At MyAdvo, she is taking care of litigation strategies and internal legal processes.

LinkedIn: https://www.linkedin.com/in/prachi-darji-539345118

Email: prachi@myadvo.in

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