Dispute with builder and planning to move court? Here’s why you need to act fast

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Published: April 11, 2018 11:22:48 AM

Although RERA has been implemented by many states, still lots of builders continue to fleece homebuyers as not all projects have got registered with RERA yet.

 homebuyers alert, dispute with builder, seeking compensation, making claim, consumer complaint, consumer court, time limit for filing consumer complaint, RERA registered projectsThe matter becomes worse when any homebuyer fails to act on time and his claim gets delayed for some reason, or when he fails to keep the proofs of his claims made to the builder.

Consumers are believed to be the king in India, but in reality that is hardly the case – particularly in case of homebuyers. Although the Real Estate (Regulation and Development) Act (RERA) has been implemented by many states, still lots of builders continue to fleece homebuyers as not all projects have got registered with RERA yet. No wonder, disputes arise and many buyers are still running from pillar to post for getting them resolved. The matter becomes worse when any buyer fails to act on time and his claim gets delayed for some reason, or when he fails to keep the proofs of his claims made to the builder. Some buyers think that they can raise their claim in a court of law even after a few years as filing a complaint is not time-bound. However, that is not true. So, if you are also thinking on similar lines, then think again. For, the court may just refuse to register your complaint if that is delayed beyond a point.

Sample this: Delhi-based Rohit Verma booked a 2-bedroom flat in Kaushambi of Ghaziabad in 2004. The flat was scheduled to be delivered in March 2005. However, Verma got the possession of his flat after two years in 2006. Meanwhile he kept paying both the rent of his Delhi-based flat as well as the EMIs of his home loan he had taken in 2004. As his income was not enough, he accumulated lots of debt in the process. Still Verma was not much worried as there was a ‘penalty clause’ in the sales agreement that the builder will “pay to the buyer penalty equal to twice the market rent of the flat” in case of non-possession of the flat up to March 2005. So, Verma thought that after getting the penalty amount from the builder, he will clear his credit card dues. However, the builder refused to give the penalty amount as per the sales agreement, but promised that they will adjust the amount somewhere else.

However, even after two years nothing happened. The builder just kept saying that they will do something, but actually did nothing. Frustrated, Verma stopped paying the maintenance amount and told the builder to adjust the amount against the penalty amount. Two years later the builder stopped the maintenance of Verma’s flat and sent him a court notice to clear his maintenance dues. Verma then had no option but to move court. However, the Court refused to register Verma’s complaint, citing a recent consumer court ruling that a complaint must be filed within 2 years from the date of the dispute.

What to do in case of RERA-registeted projects?

Legal experts say that delivering quality workmanship is the dictum for real estate developers apart from other deliverables. Thankfully, the buyers of RERA-registered projects will not have to run from pillar to post, including courts, for getting relief when there are defects (structural or otherwise) after they have taken possession of the newly-constructed property.

“With introduction of the Real Estate (Regulation and Development) Act (RERA), the buyers of property for a period of 5 years are ensured that any defects, be it structural or workmanship, will have to be attended free of charge by the developer within 30 days of the complaint,” says Sandeep Shah, partner, N. A. Shah Associates LLP.

If the developer fails to carry out the necessary rectification, the buyer has the right to complain to RERA authorities and is also entitled to compensation as specified by the RERA Act. “It is interesting to note that the complaint to authorities has to be disposed off within 60 days. So effectively, the entire process is time-bound,” he says.

What to do in case of non-RERA registered projects?

As far as non-RERA registered projects are concerned, the buyer of house property, if the developer is not responding to the complaint regarding defective workmanship, can approach the Consumer Court for redressal of the complaint.

The Supreme Court in case of Lucknow Development Authority vs. M K Gupta has held that builders/contractor(s) of housing projects are amenable to the Consumer Protection Act, 1986 and hence they are responsible for defective and faulty construction.

“It should, however, be noted that the complaint has to be filed within 2 years from the date on which the defect arises. Whether the complaint is time barred or not will always be a matter of debate and will be argued extensively. However, the District Forum may accept a complaint beyond 2 years if the buyer has sufficient reasons for not filing the complaint within such period,” says Shah.

According to experts, in other courts the time limit for filing a claim is within 3 years from the date a dispute arises. However, that too is not much. Therefore, timely action by the buyer in regard to bringing the defect to the notice of the developer and timely action thereafter is the key!

Apart from structural defects, you need to take timely action in other cases too – for instance, when some other dispute arises. Otherwise, the court may simply refuse to register your complaint and you won’t be able to do anything. Moreover, you need to keep the duplicate copy or copies of your complaint or demand letter – duly received by the representative of the builder – to prove in the court that you had acted on time. One of the major mistakes of Verma was also that he did not bother to keep the acknowledgment copies of his demand notice sent to the builder and just took their word for it!

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