Table of Contents
Introduction
Buying of property in India is one of the major sources of investment for the NRIs.However lately it has been seen that the NRIs face various hardships/difficulties pertaining to the timely delivery of the said properties/flats. When possession of a property is delayed, NRIs may seek compensation for the inconvenience and financial burden caused by the delay. The specific compensation mechanisms and the legal framework can vary depending on the jurisdiction, the terms of the contract, and the nature of the delay.
Types of compensation:-
Interest on Payments Made: NRIs can claim interest on the amount paid towards the property/flat. This interest to charged for the delay in possession is generally mentioned in the agreement to sell but time and again the courts have observed that agreement to sell which are often prepared by the builder are one sided and heavily loaded in favour of the builder, thus in such cases, the clauses in the agreement are not binding on the buyer if they are in not consonance with the principles of natural justice.
Rent Reimbursement: If the NRIs are forced to rent a property due to the delay, they can claim the rental expenses incurred during the delay period.
Penalty Payments: Some contracts include clauses that require the developer to pay a penalty for each day or month of delay. And along with that the courts can also penalize the builder and award compensation for the mental agony being faced by the buyer due to the delay in possession.
Refund: NRIs may be entitled to a full or partial refund of their payments if the delay is significant or indefinite.
Steps to be taken if the possession of the property has been delayed:
- Review the contract or agreement to sell: Check the sale agreement for any clauses related to delays and compensation. These clauses often outline the specific remedies available and the procedures for claiming compensation.
- Document the delay: Keep a detailed record of communications with the developer or seller, including emails, letters, and any notices received about the delay. This documentation will be crucial in supporting your claim.
- Calculate your losses: Determine the financial impact of the delay, including interest payments, rental costs, and other expenses incurred. This calculation will help substantiate your claim.
- Send notice : Contact the developer or seller to discuss the delay and your entitlement to compensation. Provide written notice of your intention to claim compensation and detail the basis for your claim.
- Seek legal advice : Consult with a real estate lawyer to understand your rights and the best course of action. Legal advice is particularly important if the developer is uncooperative or disputes your claim.
- File a complaint : A formal complaint can be filed with the concerned consumer commission or with real estate regulatory authority(RERA).
Landmark Judgements
Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan (SC)
Inordinate delay in handing over possession of flat to purchaser clearly amounts to deficiency in service on part of builder – Where terms of Agreement wholly one-sided and unfair to Flat Purchaser – Builder could not seek to bind contractual terms.
A. Consumer Protection Act, 1986 Section 23 Delay in delivery of possession of flats – Deficiency in service – Builder obtained Occupancy Certificate almost 2 years after date stipulated in Apartment Buyer’s Agreement during pendency of proceedings before National Commission – As consequence, there was failure to hand over possession of flat to purchasers within reasonable period – Inordinate delay in handing over possession of flat clearly amounts to deficiency of service – Person cannot be made to wait indefinitely for possession of flat allotted to him, and is entitled to seek refund of amount paid by him along with compensation.
B. Consumer Protection Act, 1986 Sections 2(r) and 23 Unfair trade practise – Binding of Apartment Buyer’s Agreement – Perusal of Apartment Buyer’s Agreement reveals stark incongruities between remedies available to both parties – Terms of Agreement wholly one-sided and unfair to Flat Purchaser – Builder could not seek to bind one-sided contractual terms – Builder charged interest @ of 18 % on account of delayed payment of instalment – Whereas in case of delay Builder was liable to pay interest @ of 9% p.a. – NC has rightly awarded 10.7% p.a interest – No illegality in order.
M/s. Imperia Structures Ltd. v. Anil Patni (SC)
Delay in delivery of possession of flat – Complaint – Choice is given to allottees of flat whether he wishes to initiate appropriate proceedings under Consumer Protection Act or file application under RERA Act.
A. Consumer Protection Act, 1986 Section 23 Real Estate (Regulation and Development) Act, 2016, Section 18 – Delay in possession of flats – Return of amount and compensation – Apartments were booked by Complainants in 2011-2012 and Builder Buyer Agreements were entered into in November, 2013 – As promised, construction should have been completed in 42 months – Period expired well before Project was registered under provisions of RERA Act – Merely because registration under RERA Act is valid till 31.12.2020 does not mean that entitlement of concerned allottees to maintain action stands deferred – Period has to be reckoned in terms of agreement and not registration and entitlement of Complainants must be considered in light of terms of Builder Buyer Agreements – Proceedings initiated by complainants and resultant actions including orders passed by Commission are fully saved.
B. Consumer Protection Act, 1986 Section 23 Real Estate (Regulation and Development) Act, 2016, Sections 71 – Complaint – Jurisdiction – Complainant who had initiated proceedings under CP Act, before RERA Act came into force, entitled to withdraw proceedings under CP Act with permission of Forum or Commission and file appropriate application before adjudicating officer under RERA Act – Provision gives option to concerned complainant but does not statutorily force him to withdraw such complaint nor do provisions of the RERA Act create any mechanism for transfer of such pending proceedings to authorities under RERA Act – Choice is given to allottee whether he wishes to initiate appropriate proceedings under CP Act or file application under RERA Act.
Conclusion
Compensation for delayed possession of property is often a matter of contract law and specific regulatory frameworks. NRIs should be proactive in documenting the delay, calculating their losses, and pursuing their claim through the appropriate channels, whether by negotiation, regulatory complaint, or legal action. Consulting with a legal professional is advisable to navigate this process effectively.