Buying a property is often the biggest investment that most people make in their lives. It is an exciting time filled with the promise of a better future but also a time fraught with danger. Unfortunately, for many buyers, buying a property is not without its perils, and one of the most significant risks is delayed possession or no possession at all. This blog will explore a recent case exposing a property developer’s failure to deliver possession of a unit as per the Apartment Buyers Agreement (ABA).
Rajiv Singhal, a homebuyer, filed a complaint against Godrej Project Development Ltd. and another for failing to deliver possession of his unit as per the terms and conditions of the Apartment Buyers Agreement (ABA). Despite paying a sum of Rs. 51,26,000/- and the unit allotted to him in August 2014, he had not received possession even after the stipulated period of 41 months with a grace period of 6 months. The buyer requested a refund of the entire amount paid, including interest, and compensation of Rs. 10,00,000/- for mental distress, harassment, discomfort, and undue hardship caused to the buyer, as well as Rs. 1,00,000/- for legal expenses.
The Unfulfilled Promise
Godrej Projects Development Ltd. failed to provide a 24-metre road connecting the project, depicted in the advertisements and buyer agreements. This road was a key selling point in the company’s advertisements and buyer agreements, and many buyers made their investment decisions based on this promise. Unfortunately, when the project was inspected, it was discovered that the road was absent, and the distance to the nearest public way was over 1.5 kilometers through slums.
This lack of road connectivity was not the only issue against the builder. The project was also found to lack adequate utilities like water, sewage, and electricity, which were being supplied through tankers and generators. Additionally, the complainant expressed concerns about fire safety and environmental approvals, claiming that these were obtained based on an approved site plan that showed entry and exit on a 24-meter wide road that no longer existed, rendering the approvals invalid.
It’s important to note that while Godrej Projects Development Ltd. promised the road connectivity, the responsibility of constructing the 24-metre-wide road connecting the housing project to the Dwarka Expressway was that of the state authorities. This lack of clarity may have contributed to the failure to deliver the promised road connectivity.
The Verdict
The Consumer Court ruled in favor of the homebuyer, stating that uncertainty over the construction of a road and deficiency in services had disadvantaged the project’s allottees. The Commission found that the builder had violated the terms of the agreement, and the terms were arbitrary and one-sided. The Commission also found that the builder had sent a possession notice, claiming to have received the Occupancy certificate and raised a demand for the balance payment, even though the unit was not in accordance with the plan.
The builder had also made changes to the site plan without the buyer’s consent, which resulted in the municipal corporation issuing a letter stating that the changes were an infringement of National building code by-laws. Accordingly, the Commission ordered the builder to refund the total amount of Rs. 51,36,338/- paid by the buyer along with interest @ 9% per annum from the date of each payment till the date of refund. In addition, the developer was directed to pay Rs. 25,000 as a litigation cost to the complainant within three months from the order date.
Conclusion
To summarize, the real estate industry is a complex and dynamic sector, and buying a property is a significant decision. Homebuyers put their hard-earned money and trust in the builder, expecting timely possession of their dream home. However, not all builders deliver on their promises, leading to buyer disputes and financial losses.
Real estate developers must deliver projects on time and in the promised condition. If they fail to do so, they are liable for deficiency of service and can be held accountable by the consumer court.