Delay in Delivery of projects from the Builder pose relief to Home Buyers





The latest ruling is set to put cash strapped propertydevelopers on a huge financial burden as home buyers of a housing project which is in construction will automatically be the party to launch a case against the builder. 

Under Section 12 (1) of the Consumer Protection Act, irrespective of whether the buyers have filed a case or not they will be eligible for benefits according to a National Consumer Disputes Redressal Commission. The new rule states that failure of the builder or property developer to deliver the house before the date set for possession or for a plot, on behalf of the customer the NCDRC will charge the property developers under Section 12 (1) of the Consumer Protection Act.

This is a groundbreaking judgement for the home buyers as they are subjected to many benefits without going through the judicial process, said Sahil Sethi, senior associate at law firm Saikrishna and associates, who represented the hard working buyers against Jaypee in Kalypso court case.
But Sethi feels that this judgement would increase the burden on the property developers as they will have to pay everybody, which might be difficult for the builders to do so. Home Buyers can also now move to NCDRC if the total value of goods or services and the compensation collected in the complaint exceeds one crore. In case the grievance of the buyer is an identical relief claimed for all of the applicants, the cost, and the size and the area of the flat/plot and the date of booking/purchase and allotment, then it would be meaningless, according to the order. Sethi also fears that these benefits for the buyers could be taken advantage off by the investors as well. 

In the recent past Consumer activism has been on the up and in the recent past, favorable judgements towards the major property developers have instilled confidence among the home buyers to move these appeals to court.

NCDRC has recently taken up among them to act against many big players in the real-estate industry to resolve the issue of home buyers. The NCDRC recently ordered Jaypee to pay 12% interest for delaying its Kalypso Court project in Noida. In another order it also asked Mumbai-based property developer Lodha group to give back 1.02 crore to a buyer with 18% interest. On May 6th 2016 they also asked Parsvnath Developers to give back the entire amount which was paid for by 701 home buyers in its Parsvnath Exotica project in Ghaziabad with 12% interest for failing to construct the project on time. 

The order would be in effect for old as well as new cases filed under section 12 (1) of the act, and according to Mr. Sethi senior associate at law firm Saikrishna and associates, it would make life incredibly tough for delinquent property developers.

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