Introduction
Purchasing a property is a significant milestone for most individuals. However, the path to property ownership can be challenging, and issues with property developers can arise, leading to the need for legal action. Understanding the essential factors to consider when filing a claim against a property developer is crucial to ensure your rights are protected, and you can seek appropriate remedies. This article outlines the key considerations when filing a claim against a property developer.
Summary
- Understanding the essential factors to consider when filing a claim against a property developer is crucial to ensure your rights are protected, and you can seek appropriate remedies.
- When the developer causes delays or defaults in service, and it becomes impossible to get a hold of the defaulting party, the hapless buyers need to knock on the Court’s door to get justice.
- Non-delivery of the property within the stipulated time frame, project cancellation without a legitimate explanation, and Insufficient amenities such as water tanks and ventilation are a few examples where the buyer needs to approach the Judicial Authority for remedy.
- In case of default in service by the developer, the buyer can approach the RERA Authority or Consumer Forum.
- While you can approach both forums independently, it is advisable to engage a property lawyer. Only an expert can send a well-drafted legal notice and complaint.
Table of Contents
Reasons to File a Complaint/Claim Against a Builder
Developers often lure NRI buyers through aggressive sales teams. This sales team attracts buyers through false promises, such as if the property is not delivered on time, the developer will return the money with interest. But once the builder engages the buyer and starts causing delays, getting a hold of the builders becomes impossible. In that situation, the unfortunate buyers must knock on the Court’s door to get justice.
Must Read: Steps to take when your NRI property in India is illegally occupied
Grounds for filing a complaint against a property developer or builder
- Poorly constructed building.
- Non-compliance with the agreed-upon layout, specifications, and structure.
- Failure to provide promised parking space.
- Overcharging compared to the initial agreement.
- Imposing undisclosed hidden charges.
- Lack of proper documentation, including payment receipts and valid sale agreements.
- Project cancellation without a legitimate explanation.
- Insufficient amenities such as water tanks and ventilation.
- Non-delivery of the property within the stipulated time frame (typically two years from commencement).
- Failure to establish a housing society and transfer control.
- Absence of required permissions from relevant authorities.
- Failure to provide essential documents such as NOC, OC, approved plans, etc.
- Involvement in fraudulent activities during the property transaction.
Must Read: NRIs in the US and Canada have to pay tax on capital gains
Legal Avenues: Consumer Court and RERA
Once the developer defaults in service, it becomes crucial for buyers to approach the correct forum to get the appropriate redressal. In housing construction projects, the buyers have two options to recover money quickly. The buyer can approach Consumer Courts or the RERA Authority; both forums have concurrent jurisdiction.
Consumer Court
Consumer courts operate nationally, at the state and district levels and have considerable experience handling such cases over the past few decades. They are a preferred legal avenue against builders due to their extensive history. However, it is essential to note that consumer courts primarily award compensation or refunds, which can be a more limited remedy than RERA offers.
Filing a Consumer Complaint for claim against a property developer
While you can approach the consumer court independently, it is advisable to engage a property lawyer.
The process involves:
- Sending a well-drafted legal notice to the builder, specifying the expected response and time frame.
- Awaiting the builder’s response. If the builder fails to comply, proceed to file a complaint.
- Filing a complaint with the Consumer Court should include precise details such as builder and buyer information, the agreement, payment proof, grievance specifics, property details, and the compensation sought.
- The court fee varies based on the claim value. Submitting fees for filing the complaint is a pivotal aspect of the process.
Must Read: Repatriation of funds by NRIs
Three-tier mechanism
As per the Consumer Protection Act, a three-tier mechanism exists for resolving consumer grievances:
- The District Consumer Forum serves as the initial forum, handling complaints where the value of the house and any claimed compensation does not exceed Rs 50 lakh.
- If the house’s value and claimed compensation exceeds Rs 50 lakh but does not surpass Rs 2 crores, the State Consumer Commission entertains the complaints.
- In cases where the value of the property and claimed compensation exceeds Rs 2 crores, the National Consumer Disputes Redressal Commission (NCDRC) possesses the jurisdiction to address such complaints.
RERA (Real Estate Regulatory Authority)
Authorities under RERA have been established across the majority of Indian states. If your state has a functioning RERA authority, it may be beneficial to approach them before the consumer court. RERA has the unique advantage of ensuring cases are decided within 120 days, considering consumer interests, project completion dates, and awarding compensation.
Filing a Complaint Under RERA
- Visit the official State Portal of RERA.
- Find the Complaint Registration section and provide details of your grievance.
- Enter personal information and attach supporting evidence/documents.
- Fees generally start from Rs 1000 but may reach Rs 5000 for an Adjudicating Officer.
Must Read: Property Disputes in India
Applicability of RERA
Understanding whether your case falls under the purview of RERA is crucial. Specific criteria, such as the project’s size and completion status, determine if you can approach RERA.
FAQs
Yes, a compensation can also be claimed if the builder is at fault.
Yes, the builder can be sued for the same under deficiency of service.
While you can approach both forums independently, it is advisable to engage a property lawyer. Only an expert can send a well-drafted legal notice and complaint substantiating your claim in the Court of law.
RERA will be the appropriate authority if the project is large (exceeding 500 sq. mtrs or units more than 8).
It depends upon the terms and conditions of the agreement. In general, the buyer can stop the instalment, and he can seek a refund of his instalments already paid from the Court due to the buyer’s delay.
Various grounds include Poorly constructed buildings, non-compliance with the agreed-upon layout, specifications, and structure, failure to provide promised parking space, overcharging compared to the initial agreement, imposing undisclosed hidden charges, lack of proper documentation, etc.
RERA might be a quicker way to resolve issues (within about four months), and it focuses on helping buyers and giving compensation. So, it can be a comparatively better choice.
An execution petition can be filed in the same Court for claiming the compensation as per the order of the Court.
The buyer can approach Consumer Courts or the RERA Authority; both forums have concurrent jurisdiction.
Filing a complaint helps protect your rights as a property buyer. It is a mode to address issues like faults in construction, charging hidden fees, not delivering what was promised and getting redressal.