DELAYED POSSESSION AND COMPENSATION UNDER RERA

What Is To Be Done If There Is A Delay In Possession And Compensation Under RERA

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The homebuyers’ delayed possession of apartments or plots has emerged as one of India’s real estate business’s most critical concerns. In recent years, homebuyers have often approached Courts and Tribunals with complaints about promoters and developers failing to deliver flats in the scheduled timeline.

RERA Order

The adjudicating authority ruled in favour of the allottee and ordered the Promoter to pay the Allottee/Complainant. The adjudicating officer determined the total compensation amount to be Rs. 5.04 Crores up to June 30, 2018, i.e., till the time of filing the complaint, including a six-month extension from the stipulated date of possession of the suit property.

RERA Appellate Authority Order

As a result, the Promoter appealed this judgment before the RERA Appellate Body. However, the appellate authority maintained the order made by the Maharashtra RERA Authority in orders dated January 9, 2020, and January 24, 2020. The appeal authority determined that the Promoter/Appellant was a promoter and required to deposit 50% of the compensation sum under Section 43(5) of the Act. As a result, a relevant appeal was dismissed. The Promoter was ordered to pay the compensation to the allottee.

Bombay High Court

  • The Hon’ble Court recognized that the Appellant was a Promoter since he was involved in developing a real estate project and selling plots and apartments. The Court also noted that the agreement entered between the parties dispute explicitly stated the transfer of suit property and therefore constituted an “agreement for sale.”
  • The Court said that because the Appellant was a promoter, he was required to follow the proviso to Section 43(5) of the Act and pay 50% compensation as a condition antecedent to initiating an appeal. As a result, the Hon’ble Bombay High Court found no flaws or illegalities in the challenged decisions issued by the adjudicating authority and affirmed them.
  • The Court thus dismissed both appeals and ordered the Promoter to pay half of the compensation as directed by the adjudicating authority within the stipulated time of four weeks and further instructed that no sale of the suit property would take place until the balance was paid. Failure to comply with the order would authorize the concerned tehsildar to commence the sale of the suit property.

Before 2016, the lack of a particular law controlling the Real Estate sector in India rendered home buyers powerless and severely disabled in such circumstances of delayed or non-possession of flats even after paying the total consideration as per the terms of the development agreement. However, the passage of the Real Estate (Regulation and Development) Act, 2016, and the judiciary’s harsh stance against such builders have aided in shaping the law and legal ramifications connected to delayed possession of flats by promoters/builders in India.

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