Stuck in a delayed project! Now what?

Bikram Lahoti, a software engineer in Delhi booked a flat in the year 2003. The possession was to happen somewhere around July 2005. Lahoti’s parents were to come and stay with him in 2005 and he had planned to take them straight to his own home and not his shabby rented accomodation. But that house wasn’t ready and looked nowhere next to getting ready either.

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Here is another case – Kumaran booked a flat in the year 2006 at Rs 1350 per sq ft for a 3BHK of 1500 sq ft area. The construction finally started in 2011 and the builder was straight faced when he told Kumaran that they wouldn’t be offering 3BHK units. Kumaran would have to do with a 2BHK flat and the prices had escalated. As per the agreement, the firm would pay a penalty of Rs 5 per sq ft per month. Almost 500 others like Kumaran are stuck.

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In a recent GuruTalk, a chat session organised by Magicbricks, Madhav Nair raised a simple question – “Why do buyers take for granted a year’s delay in project construction when the banks wouldn’t give any concession on the EMIs?” Asha Nayar Basu, senior partner, S Jalan and Company, Solicitors and Advocates says, “It is simply because we do not have a regulator in place and buyers are not aware of their rights.”

If you are an aggrieved party like Kumaran, Basu suggests, “You should send the developers a legal notice. On 19th May, 2014 the Competition Appellate Tribunal upheld the 2011 order of the Competition Commission of India holding a reputed developer guilty of abusing its dominant market position with regard to a residential society in Gurgaon.”

Some quick tips-

1)In case of delay in delivery of possession by the builder, the legal options that are available to the allottee are to file a consumer complaint or file a civil suit against the builder for refund of the amount paid to the builder and the interest thereon.

2)In case of undue delay, the buyer can also file a complaint before the Competition Commission of India if the builder is a dominant entity in the market and using his dominant position to the detriment of the buyer. If the allottee is over-burdened by the excessive hidden charges in the allottee builder agreement, the allottee can file a civil suit in a civil court.

3)If the property is under construction, ask for approval of drawings and the plan of the project. You would know that the property is to be built on undisputed land. Also, make sure the carpet area with area left for balconies are marked separately. Price of the property including the proportionate price of common areas and facilities should also be indicated separately and the intervals at which installment may be paid.

4)Check for building by-laws in the area to verify any issue with setback, side setback and height. Confirm with the builder the finance related issues like transfer fees, stamp duty and registration charges to be paid on purchase of the property as well as outgoings to be paid for the property. This will help you to manage your budget.

5)Engage a lawyer for a better insight.

What causes such delays?

There are a number of reasons for delays – “Some developers try to sell property even before they have obtained the license to do so, some other mis-manage their cash inflow, others go overboard with their expansion plans,” says Arun Alok, an individual consultant at Top Properties.

Arun gives a classic example of a developer who had a track record of late project deliveries. “This reputed developer grew so ambitious that with the money he got from buyers, he used it to buy plots in his next construction site.”

What can you do at a personal front?

Besides the legal recourse, if a project is delayed, surely there is more than one buyer involved. Try getting together with local action groups that have a common goal. Also, try to understand the stage of construction at which you chose to get in. Was it the pre-launch stage when you put in your money and the approvals had not come? You should be careful about that.

Also, get a thorough understanding of the subvention schemes, construction linked plans etc. This would help you to protect yourself against financial vagaries. But be careful, here’s a case-

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Recently, CREDAI urged developers in the NCR to complete their existing projects before starting new ones. A good move indeed! Perhaps, the developer fraternity needs to take the cue. Till that happens, buyers need to be aware of their rights.

Source:http://content.magicbricks.com/industry-news/delhi-ncr-real-estate-news/stuck-in-a-delayed-project-now-what/78622.html