How to tackle delayed possession of your property?
Feb 20, 2024
In the face of increasing instances of delayed possession of real estate in India, homebuyers must be informed about their rights and the legal recourse available to them.
For those wondering about the course of action when a builder delays a project, there are remedies available. By understanding the reasons and taking informed steps, homebuyers can navigate this challenging situation with clarity and assert their rights in the realm of real estate projects.
This article explores the potential reasons behind possession delays by builders and outlines the steps and essential terms in this domain.
What is Delayed Possession of Your Property?
Delayed possession of a property refers to the extended timeframe beyond the initially promised date for the homebuyer to take possession of their property. This situation arises when the builder fails to complete construction or fulfill project commitments on time, causing frustration for buyers awaiting occupancy. The delay of possession can damage trust between homebuyers and builders, requiring a clear understanding of the legal options and remedies available to the buyers in such circumstances.
Homebuyers facing delayed possession may encounter challenges such as continued rental expenses or disruptions, prompting the need for legal recourse to address the builder-induced delay.
Possible Reasons for Delay in Possession
Several common reasons contribute to delays in property possession for buyers, which include:
Regulatory Approvals
Delays in obtaining crucial regulatory approvals can significantly ruin the process of issuing possession certificates, creating substantial setbacks in the scheduled handover of properties to buyers. The time-consuming nature of regulatory procedures can substantially affect the overall timeline for property possession.
Financial Constraints
Builders grappling with financial constraints often find it challenging to execute and complete projects within stipulated timelines, leading to delays in delivering possession to property buyers. These constraints include insufficient funds, hampering construction progress and affecting the scheduled possession handovers.
Contractual Disputes
Ongoing disputes between builders and their contracted parties, including contractors or subcontractors, can introduce complications and hinder the smooth progress of construction projects. Such disputes may result in prolonged negotiations, impacting the anticipated possession timelines for property buyers.
Force Majeure
Unforeseen events, including natural calamities or political instability, which are beyond the control of any party involved, can disrupt construction activities. Force majeure events introduce unpredictable delays, influencing the completion schedule of construction projects and subsequently affecting property possession timelines for buyers.
Inefficient Planning
Inefficiencies in project planning, encompassing aspects such as poor execution, a shortage of skilled labor, and inadequate project supervision, contribute to delays in completing construction projects. These inefficiencies directly impact the overall timeline for property possession, causing extended delays for buyers awaiting their homes.
Must Read:-
Possession Certificate and Its Importance
Steps To Follow If Delay in Possession of Property?
In the event of a property possession delay, the following steps can be taken:
- Legal Recourse Within RERA: The Real Estate Regulatory Act (RERA) serves as the primary legislation overseeing the real estate sector, safeguarding buyer interests and regulating developers and agents. If faced with possession delays, one can file a RERA complaint against the builder, seeking interest or a refund for delayed possession. Non-compliance may result in penalties or imprisonment.
- Legal Recourse Outside RERA: Despite RERA's establishment, consumer courts under the Consumer Protection Act of 1986 remain accessible for real estate complaints. Homebuyers can approach District, State, or National Commissions based on the property value, seeking redress for possession delays beyond RERA's jurisdiction.
Must Read:- Steps For RERA Registration Delhi
Legal recourse for delayed projects under RERA
Here’s how you can seek legal recourse for delayed projects under RERA:
- Filing the Complaint: According to Section 31 of RERA, a dissatisfied consumer can file a complaint with the appointed authority or adjudicating officer under the legislation. Complaints can be lodged against both builders and real estate agents, following the Act's specified procedures.
- Claiming Refund: RERA provides homebuyers the option of seeking interest on delayed possession or a complete refund with interest. If a builder unilaterally alters the possession date, buyers can withdraw and claim a refund within 45 days. If buyers retain the property, they are entitled to monthly interest for delays, automatically initiated by the builder, with grievance resolution available through the Authority.
Legal Recourse Outside RERA
Here's how you can seek legal recourse beyond RERA:
- Consumer Protection Act, 1986: Homebuyers can register a complaint under Section 2(1)(c) for deficiency in services. Deficiency in services includes faults, imperfections, shortcomings, or inadequacies in the quality, nature, and manner of performance mandated by law.
- NCDRC Ruling on Possession Delays: The National Consumer Disputes Redressal Commission (NCDRC) ruling allows buyers to seek a refund if possession is delayed beyond one year.
- Consumer Court Jurisdiction Based on Property Value: For properties valued up to Rs 20 lakh, complaints should be filed with the District Commission. Properties valued between Rs 20 lakh and Rs 1 crore should be addressed with the State Commission. Claims exceeding Rs 1 crore require homebuyers to approach the National Commission.
What are Your Rights For Delayed Possession of Your Property?
When considering a property purchase in India, it's crucial to be informed about your rights. Many buyers miss out on potential remedies and compensation for possession delays because they lack awareness of their rights. Since RERA operates differently in each state, visiting your state's RERA website allows you to access information on ongoing projects, their status, and profiles, streamlining your home-buying experience.
Beyond choosing the right project and builder, selecting an appropriate financier is equally vital for real estate investment. Real estate loans, spanning 10-20 years, necessitate careful consideration by the lender to ensure a smooth and satisfactory financing experience.
Conclusion
SMFG Grihashakti is the preferred choice for Indian homebuyers, providing competitive interest rates, flexible terms, and expedited loan processing. For comprehensive details on applying for a home loan, understanding interest rates, necessary documents, and eligibility criteria, visit our home loan page.
Take the next step towards homeownership and apply now with SMFG Grihashakti, where affordability, flexibility, and a smooth application process are prioritized for your convenience. Apply now!
FAQ's
What is the compensation for the delay in possession of the flat?
If the possession of a flat is delayed, buyers have the right to claim compensation, simple interest at 6% per annum, or a complete refund under RERA regulations.
How can I check the project details?
To obtain comprehensive project details, visit your state's RERA website. There, you can access all the necessary information about the project, ensuring transparency and informed decision-making.
How can I file a complaint with RERA authorities?
To file a RERA complaint against the builder, visit your state's RERA website. If online filing is challenging, you can submit the complaint in person at the nearest RERA department. This ensures accessibility and facilitates the resolution process for any grievances you may have with the builder.
Can I file a RERA complaint against the builder in the court?
RERA authorities address complaints against builders and agents. If needed, you can also file a complaint with the consumer court outside RERA. However, civil courts don't handle consumer complaints against builders, as RERA authorities have jurisdiction in such matters.
What are the reasons behind project delays?
Construction delays can result from diverse factors, such as weather, equipment failures, labor shortages, inaccurate data, project errors, and conflicts. While uncontrollable weather conditions may contribute, many construction project delays are preventable. Proactive planning, efficient project management, and addressing potential issues can significantly mitigate the risk of delays in construction projects.
What is the RERA penalty for builders who fail to pay compensation for a delay?
In the event the builder neglects to provide the stipulated compensation, consequences may include a fine of up to 10% of the estimated cost of the project, imprisonment for a term extending up to three years, or a combination of both penalties. This serves as a deterrent for builders to fulfill their commitments and meet the expectations outlined in the regulatory framework.
What is the possible impact of a project delay?
Delays in projects incur significant costs and can lead to disputes, budget overruns, legal battles, or even the complete abandonment of the project. The ramifications of delays impact all stakeholders involved, emphasizing the importance of effective project management and risk mitigation strategies to ensure successful and timely project completion.
What is the notice of delay in construction?
To claim an extension of the completion date or recover project costs, a contractor, whether it's the developer or a third party, must issue a notice of delay. This formal notification serves as a crucial step in the process, allowing for proper documentation and assessment of the impact of the delay on the project's timeline and finances.
What are the RERA rules for delayed possession?
Section 18 of RERA addresses delays in possession by the promoter, offering consumers two choices. They can opt to terminate the agreement, prompting the promoter to refund the entire amount paid with interest. Alternatively, consumers can choose to continue with the project, seeking compensation from the builder for each month of delay until possession. This provision ensures that consumers have recourse and flexibility in navigating project delays as outlined in the regulatory framework.
How much is the RERA penalty for delay in possession?
If the promoter fails to complete the project within the agreed time or delays property possession, they are obligated to refund the amount received from the buyer along with the corresponding interest. The interest rate is typically set at 10% of the total amount invested by the buyer, ensuring compensation for the delay in project completion as per the terms outlined in the sale agreement.
Disclaimer: *Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG Grihashakti. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG Grihashakti’s policy at the time of loan application. If you wish to know more about our products and services, please contact us.