Delay in Possession by the Builder: What to Do?

Purchasing a home is a significant milestone, and timely possession is a fundamental expectation for homebuyers. However, delays in possession by builders are not uncommon, leading to financial and emotional distress for buyers. If you find yourself in such a situation, it’s essential to understand your rights and the legal remedies available to you.

Understanding the Issue

Builders often commit to delivering possession of a property by a specific date. Delays can occur due to various reasons, including construction issues, financial constraints, or unforeseen circumstances. Regardless of the cause, such delays can significantly impact buyers, especially those who have planned their finances and life around the expected possession date.

Legal Framework and Remedies

Consumer Protection Act, 1986: Under this Act, a builder’s failure to deliver possession on time constitutes “deficiency in service.” Homebuyers can file a complaint with the Consumer Forum seeking compensation for the delay. The forum may direct the builder to pay interest on the amount paid by the buyer or even order a refund along with compensation.

Real Estate (Regulation and Development) Act, 2016 (RERA): RERA mandates that builders must adhere to the possession date specified in the agreement. If there’s a delay, the builder is liable to compensate the buyer. Buyers can file a complaint with the respective State RERA authority to seek redressal.

Recent Case Laws

Jaiprakash Associates Ltd. v. Ramesh Chandra Agarwal: In this case, the National Consumer Disputes Redressal Commission (NCDRC) held that a builder cannot be asked to compensate for late possession beyond the date of the offer of possession. The builder was directed to pay compensation only up to the date of the offer.

Wg. Cdr. Arifur Rahman Khan And Aleya Begum v. DLF Southern Homes Pvt. Ltd.: The NCDRC observed that despite a delay in handing over possession of the residential flats, the purchasers were not entitled to compensation. The commission emphasized the importance of the builder’s contractual obligations and the terms agreed upon by both parties.

Steps to Take

Review the Agreement: Examine the builder-buyer agreement to understand the possession date and the clauses related to delays.

Communicate with the Builder: Initiate formal communication with the builder, preferably in writing, to seek clarification and demand a new possession date.

File a Complaint: If the builder fails to respond satisfactorily, file a complaint with the Consumer Forum or the State RERA authority.

Seek Legal Counsel: Consult a lawyer specializing in real estate to explore further legal options, including filing a suit for breach of contract.

Due Diligence: Before purchasing, research the builder’s reputation and track record for timely possession.

Clear Documentation: Ensure that all agreements are clear, with well-defined terms regarding possession dates and penalties for delays.

Regular Monitoring: Stay informed about the construction progress and maintain regular communication with the builder.

Conclusion

While delays in possession by builders can be challenging, understanding your legal rights and the available remedies can help mitigate the impact. Prompt action and informed decisions are crucial in safeguarding your interests as a homebuyer.