An eye for an eye: Things to know before homebuyers default on project delivery

Incessant delay in realty projects is nothing new, especially in today’s day and age. The reasons can be numerous – complexity in procedures, failure of stakeholders in coming to an agreement, etc. Many a time, it is due to builders’ false promises and worse, many homebuyers are unaware of the legal systems in place which they can leverage if the builders indefinitely fail to deliver the projects at the said time.

Under the RERA Act, 2016, a home buyer can file a complaint and/or send a legal notice to the builder for project delay. This allows buyers to get a refund of payment along with interest until the possession is handed over by the builder. Typically, RERA Act is said to resolve a case within 60 days, with the court fees ranging from one thousand to a few thousand rupees.

Consumer forum is also a portal that homebuyers can leverage should builders fail to deliver the projects as promised. The Consumer Protection Act, passed in 1987, enables buyers to file complaints and get refund with interest. While the process may take longer than RERA, many homebuyers have often cited consumer forum to be more ‘buyer-friendly’ compared to other authorities that are in place.

Oftentimes, developers default on their promise due to lack of funds and therefore refuse to settle matter with homebuyers. This is where the role of NCLT (National Company Law Tribunal) comes in! However, as per the recent amendments, at least 10 per cent of the total number of buyers or a minimum of 100 buyers in a housing project should come together. Hence, a single homebuyer cannot approach NCLT.

In its bid to protect home/flat buyers from builders, the Supreme Court has also issued notice to the Centre for the formulation of a model builder-buyer agreement and agent-buyer agreement in the realty sector. “Uniform buyer-builder agreement is required to be framed by Centre to protect interest of lakhs of home buyers,” the SC said.

Even though the housing ministry had framed a model builder-buyer agreement for housing projects earlier, it wasn’t adopted by any state. Hopefully, the intervention of the SC will pave way for a uniform builder-buyer agreement this time.

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