What to Do if There is Delay in Possession by the Builder?

Spending your hard-earned money to buy your lifelong dream of a house, and then not receiving it on time can be incredibly frustrating. If you are living in a rented house currently, you might also have to pay the rent along with the EMIs.

The mental and financial struggle that is caused by such a situation is undeserved and unfair. There have been incidents where the buyers have been delayed possession and were threatened by the builder when questioned about it. Moving against the sellers/builders in order to earn your rights can be intimidating, but necessary.

Delaying possession of a property has been a long persisting problem in India. Due to this, the government felt the need to make specific provisions to settle this type of dispute and protect the rights of the buyers and legal remedies were made available under the civil, criminal and consumer laws.

1. Consumer Protection Act (1986)

The Consumer Protection Act allows buyers to submit complaints against the developer. In a situation where the builder is delaying the possession of a property, the buyer is required to take the first step by sending a legal notice to the builder under the Consumer Protection Laws.

If there is no response from the builder or they take no actions to mitigate the damage, the buyer can approach the authorities to file a consumer complaint. There are 3 redressal mechanisms based on the amount involved:

District Consumer Dispute Resolution Committee: Disputes up to 20 Lakh INR are filed before it.
State Consumer Dispute Resolution Committee: Disputes up to 20 Lakh INR to 2 Crore INR are filed before it.
National Consumer Dispute Resolution Committee: Disputes over 2 Crore INR are filed before it.

2. Real Estate Regulation Act (2016)

RERA is a relatively new law and it is still in development. It was formed to help the people with real estate troubles, as well as regulate and promote real estate in India. It ensures the sale of plots, buildings, and transparency of real estate projects.

It is focused on the protection of the interest of buyers. It is established in every state for quick resolutions. The complaints are usually cleared in 60 days, as per the act.

Any complaints or claims where the occupancy certificate has not been granted can be filed under RERA.
The buyer has the right to get a 100% refund and their monthly interests till the delay persists.
Complaints from any state can be resolved easily.
Buyers can send legal notice to builders or transfer a complaint from the State Consumer Dispute Resolution Committee to the State Real Estate Regulation Act as per RERA 2016.
Buyers have the right to terminate the agreement and request a refund, or to demand the continuation of the project and receive compensation from the builder during the period of delay.

RERA is responsible include the following:

Registration of Real Estate Projects
Registration of Real Estate Agents
Receiving and Solving complaints
Contribute to the growth of the real estate sector by providing suggestions to the government
Appointing adjudicating officers in the states, etc.

The court fees range from 1000 to 5000 INR and the litigation cost is between 25K to 75K INR.

3. National Company Law Tribunal

NCLT was formed to deal with corporate issues of civil nature. If the delay in possession is due to a shortage of money, NCLT is the right approach. The buyer can file for bankruptcy against the seller if the seller is unable to continue with the project. They can claim any amount of 1 Lakh INR and above. NCLT is a good choice if you are looking to be relieved quickly of the problem and the seller.

As per the Insolvency and Bankruptcy Code, the maximum time period of resolution by NCLT is 330 days. If the resolution does not occur within this time, the Adjudicating Authority will begin the liquidation procedure as per the Code.

In Summary

While there are laws in India to support any buyer facing delay in possession of the property, it is important that you are careful and cautious throughout the process of the acquisition.

The agreement has to be read thoroughly, including the points and disclaimers. The credibility of the seller should also be ensured. As a buyer, you should be aware of your rights and legal options in any situation, as well as your obligations.