A Bengaluru homebuyer was awarded Rs 7.12 lakh in compensation by the Karnataka Real Estate Regulatory Authority (RERA) for the delayed possession of a flat. The case underscores the importance of adhering to contractual obligations outlined in the agreement of sale and demonstrates that homebuyers can seek legal recourse for delays, even after taking possession of their property.
Delay in Delivery: The Homebuyer’s Struggle
In 2018, the homebuyer purchased a flat in Bengaluru with the expectation that it would be delivered within the agreed-upon timeline. Despite paying over 90% of the purchase price, the builder failed to hand over the property within the deadline and did not seek the homebuyer’s consent for an extension. When the buyer confronted the builder, they were offered Rs 1.75 lakh in compensation, which was rejected.
Ultimately, the flat was delivered on September 22, 2023, a year after the agreed grace period.
Legal Battle for Compensation
After receiving possession of the flat, the homebuyer filed a case against the builder, citing delays and seeking interest for the period during which possession was delayed. The builder, MAARS Infra Developers, cited challenges like labor shortages during the COVID-19 pandemic and difficult terrain (hard rock during foundation work) as reasons for the delay. They argued that the delay was due to “force majeure” conditions, which were beyond their control.
However, the homebuyer questioned the builder’s rationale, pointing out that he had managed to pay the full amount during the pandemic, despite the challenges.
RERA’s Judgment: Protecting Homebuyer Rights
The Karnataka RERA Judge ruled in favor of the homebuyer, stating that the signed agreement of sale is a legally enforceable contract. The judge emphasized the importance of adhering to the terms of the contract and penalized the builder for failing to meet the agreed deadlines.
Citing Section 18 of the RERA Act, the judge ordered the builder to pay Rs 7,12,638 to the homebuyer as compensation for the delay, calculated at MCLR + 2% from September 14, 2022, to September 22, 2023. The ruling highlighted that consumers should be aware of their rights and that the agreement of sale remains enforceable even after possession is granted.
Lessons from the Case
The case highlights several key takeaways for homebuyers:
- Importance of the Agreement of Sale: The agreement of sale is the foundational document that outlines the obligations of both parties. It remains enforceable even after possession is taken.
- Right to Compensation: Buyers are entitled to compensation for delays in possession, even if they do not withdraw from the project.
- Legal Recourse: Homebuyers can seek legal action under RERA for delays in project completion or handover.
- Force Majeure Clauses: Builders cannot simply cite force majeure conditions like COVID-19 to avoid compensating buyers for delays, especially if they did not seek consent for deadline extensions.
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Conclusion
The Rs 7.12 lakh compensation granted to the Bengaluru homebuyer serves as a reminder that homebuyers have legal protections under RERA. Builders must comply with the terms of the agreement of sale, or they risk being penalized for delays. Homebuyers are encouraged to be vigilant and aware of their rights when purchasing property, as this case demonstrates the power of the RERA framework in ensuring fair treatment.