Harassed by chronic project delays? Here's what you can do

What do you do when your dream of moving into your new home shows no sign of being realized? What are your available options when the project wherein you have invested your hard-earned money is being plagued by unending delays, with no help or recourse coming forth from the developer?

These are just some of the issues being faced by a increasing number of home buyers across the country today. With developers facing a double whammy of a slump in sales and a tight liquidity situation, delays in construction of residential projects are now common place in major cities like Mumbai, Delhi-NCR, Gurgaon and Chennai.

As per standard practice, developers include a grace period upto of six months, in their agreement with buyers. While most buyers do take a delay of between 6-12 months over and above the stipulated period n their stride, sometimes possession is delayed way beyond acceptable limits.

For a buyer this can translate into a virtual nightmare – of seeing his hard-earned money being blocked, failure to provide himself and his family with a roof over their heads and bearing the brunt of paying both EMIs and a monthly rent for rental accommodation. 

In such a grim scenario here’s a close look at some of the options available to a home buyer stuck in a no-win situation. 

Legal recourse:

If a project is delayed way beyond tolerable limits, a buyer has the option of sending the developer a legal notice demanding a full refund of the monies paid till date with interest. Further as defined under the Consumer Protection Act, 1986, a buyer can also lodge a complaint for - deficiency of service - against the said developer. 

Depending on the value of the property in question or the amount of damage incurred, a buyer can file a written compliant with any district-level consumer dispute redressal forums. For disputes involving sums of INR 20 lakhs and above, complaints can be filed directly with the State Commission, while those involving sums of INR 1 crore and above can be put before the New Delhi-based National Commission. 

A recent case in point is that of a leading Delhi-based developer who was fined an amount of INR 3 crore by the National Consumer Dispute Redressal Commission, for inordinate delay in the handover of flats at one of their projects.

In similar instances, over 300 buyers staged a protest against a Greater Noida builder for delays in handing over flats at one of his ongoing projects, while a Mumbai-based developer was ordered to compensate buyers for the same reason.

According to legal experts, harassed buyers also have the option of filing a regular case before a relevant court of law to claim damages, as per the provisions of the Indian Contract Act of 1872. Civil and criminal proceedings can also be invoked against the said developer in cases where he has willfully defrauded buyers of their hard-earned monies despite being fully aware of pending issues that could hinder the timely completion of the project. 

What you can expect in terms of relief:

Here’s a look at some of the measures that you can expect in terms of inter alia relief after having opted to initiate legal proceedings against an errant builder.

A buyer can claim a refund of the money paid to the developer till date with interest.

Claim the amount required to funds the purchase of alternate accommodation at the current market value in the same area.

If the property has been purchased for personal use, the buyer can also seek relief by lodging a complaint with the relevant Consumer Dispute Redressal Commission. 

If the developer is likely to handover possession within a fixed duration of time, a first-time home buyer can claim compensation for the rent he is likely to bear during this period.  This is also applicable in the case of re-development projects.

The buyer can also demand compensation from the developer on the grounds of lost opportunity for the funds blocked by his investment into the said project.

For his own safety it is advisable for a home buyer to first exercise due diligence and read all the points and disclaimers (if any) mentioned in a sale agreement carefully prior to signing on the dotted line.