the keys until March 2013 as the work is not complete. When the buyer asks reasons for the delay, he is presented with an option: take back the Rs 60 lakh paid from 2007 to 2010.
The buyer had two choices then. One, he may wait indefinitely for the project to complete, as he has already exhausted his funds. Two, he can take Rs 60 lakh back and look for other options.
This is also not possible as the rates in the area have doubled and he will get a far smaller unit for the same price at that locality. This buyer in this case has lost both the house and time. The developer will sell the same flat to another buyer at the current market value say Rs 12,000 per sq ft and would make Rs 1.2 crore, an extra profit of Rs 60 lakh.
“In some cases, where the buyers are able to exert some pressure, the developers have paid about 10 to 12 per cent interest on the amount refunded,” says R Madan, an advocate who is fighting on behalf of buyers. “However, the interest was calculated from the date of possession mentioned in the agreement till the date of refund. The developers happily paid that interest as it was only for 2-3 years while they used the buyer’s money for 6 years without interest. On the other hand this interest was not substantial for the buyer to match the current market value of another flat in the vicinity,” adds Madan.
In India, sale agreements are usually prepared by the developers. The usual agreement for a standard under-construction project would usually indicate 3-4 years as the time-frame for completion. The buyer is bound to arrange the fund within this period while the developer is bound to keep his side of the deal and hand over the keys on the mentioned delivery date.
It is expected that the developer — being a businessman — must have considered all possible factors while finalising the cost and the time frame for delivery. “He has presumably paid for the land and cleared the legal title before