The Karnataka Real Estate Regulatory Authority (RERA) has recently directed a builder to pay a hefty sum of forty-eight lakh rupees as interest to a homebuyer for the delay in handing over possession of the flat. The builder was supposed to hand over the possession by March 2019 but failed to do so, leading to the homebuyer’s ordeal. This article discusses the case and its implications for homebuyers and builders.
The Case:
The homebuyer had purchased a flat in the builder’s real estate project named ND Passion Elite for a total cost of Rs. 93,37,700. An agreement of sale was entered into on 15-02-2019, stipulating that the builder was to hand over possession of the flat by 05-03-2019. The homebuyer had paid the entire sale consideration, but the builder failed to deliver the possession of the flat. The homebuyer had also taken a home loan of Rs. 75,00,000 from Andhra Bank and had been consistently paying an EMI of Rs. 59,000.
Homebuyer’s Ordeal:
The homebuyer had sent several email correspondences to the builder but had received no response. The homebuyer had also visited the builder’s office multiple times, only to receive false assurances. The builder had completed the amenities and handed over possession to buyers who had purchased through the builder’s share but not to those who had bought through the landowner’s share.
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RERA’s Order:
Aggrieved by the delay and the conduct of the builder, the homebuyer had filed a complaint before the Karnataka RERA. The RERA observed that, as per the sale deed, the builder was supposed to hand over possession of the flat to the homebuyer in March 2019. The RERA referred to the Supreme Court’s decision in M/s Newtech Promoters and Developers Pvt. Ltd vs. State of Uttar Pradesh & Ors, wherein it was held that if the promoter fails to give possession of the apartment, plot, or building within the time stipulated under the terms of the agreement, then the allottee’s right under the Act to seek a refund or claim interest for delay is unconditional and absolute, regardless of unforeseen events or stay orders of the Court/Tribunal. Therefore, the RERA directed the builder to pay a sum of Rs. 48,43,473/- as interest for the delay period from 05-03-2019 to 15-03-2024, to the homebuyer within 60 days.
Implications of the Order:
The Karnataka RERA’s order is a significant victory for homebuyers who have been facing delays in possession of their flats. The order reiterates the fact that builders are bound to hand over possession of the flats within the stipulated time, and any delay would attract interest. The order also sends a strong message to builders who indulge in malpractices and fail to deliver on their promises.
Conclusion:
The Karnataka RERA’s order is a welcome move for homebuyers who have been facing delays in possession of their flats. The order reiterates the fact that builders are bound to hand over possession of the flats within the stipulated time, and any delay would attract interest. The order also sends a strong message to builders who indulge in malpractices and fail to deliver on their promises.
