MahaRERA – Being Aware Of Market Conditions, Builders Should Conduct Due Diligence Before Declaring Project's Possession Date

While directing the builder to pay interest to the homebuyer for delayed possession, Maharashtra Real Estate Regulatory Authority (Authority) bench, comprising Ajoy Mehta (Chairperson), held that builders are aware of market conditions, therefore, they are required to conduct due diligence before declaring the possession date. Background Facts The homebuyer (Complainant) entered into an agreement for sale to purchase a flat in the builder's (Respondent) project named Om Satyam Niwas CHS Ltd on 07.09.2019. The total cost of the flat was Rs. 1,34,00,000/-, out of which the homebuyer paid Rs. 1,24,62,000/- to the builder. As per Clause 1(c) of the agreement for sale, the remaining 7% of the total cost was to be paid at the time of possession. However, despite the homebuyer paying a substantial amount, the builder failed to hand over possession of the flat by the promised date of 31.07.2020. Therefore, aggrieved by the delay, the homebuyer filed a complaint before the authority seeking possession and interest for the delayed possession. Observation and Direction by Authority The authority noted that the project is incomplete as the builder has not uploaded the Occupancy Certificate (OC) on the MahaRERA website. Thus, there is a delay on the part of the builder regarding the handover of possession of the flat to the Homebuyer with the Occupancy Certificate. The Authority referred to Section 18(1) of the Real Estate Regulation and Development Act 2016, which states: 18. Return of amount and compensation. (1) If the builder fails to complete or is unable to give possession of an apartment, plot, or building— (a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or (b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the homebuyers, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act: Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the builder, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed. The authority observed that builders, being aware of market conditions, are expected to finalize the possession date of the project by conducting thorough due diligence, as Section 18 of RERA, 2016, does not provide any waivers or exceptions to builders. Therefore, the authority directed the builder to pay interest to the homebuyer from the possession date stipulated in the agreement until the date the occupancy certificate is received by the builder. Case – Harshad Popatlal Shah & Another Versus Greenfield Developers & Realtors L.L.P & Others Citation - Complaint No. CC006000000375143 Click Here To Read/Download Order

MahaRERA – Being Aware Of Market Conditions, Builders Should Conduct Due Diligence Before Declaring Project's Possession Date

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MahaRERA – Being Aware Of Market Conditions, Builders Should Conduct Due Diligence Before Declaring Project's Possession Date

Aryan Raj

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