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Homebuyers can now seek full refund with 10% interest if flats get delayed beyond 1 year

The NCDRC in its order held that the homebuyers can ask builders for a full refund if the possession of the flats is delayed by a year from the promised date of final delivery.

twitter-logo BusinessToday.In        Last Updated: May 17, 2019  | 20:07 IST
Homebuyers can now seek full refund with 10% interest if flats get delayed beyond 1 year
Homebuyers can now seek a full refund from builders with 10% interest if the possession of their flats is delayed beyond one year, the National Consumer Disputes Redressal Commission (NCDRC) has ruled.

Homebuyers can now seek a full refund from builders with 10% interest if the possession of their flats is delayed beyond one year, the National Consumer Disputes Redressal Commission (NCDRC) has ruled.

The Commission has passed this order in the wake of incessant delays the homebuyers have to face to take the possession of their flats. The Supreme Court and various consumer courts have in the past held that the end buyers can't be made to wait endlessly to take the ownership of their flats, but did not give clarity on the timeline of the refund.

The NCDRC in its order held that the homebuyers can ask builders for a full refund if the possession of the flats is delayed by a year from the promised date of final delivery.

Also Read: Amrapali Group committed first degree crime by cheating home buyers: SC

"It is now established that allottees have the right to ask for a refund if possession is inordinately delayed, particularly beyond one year," a bench of Prem Narain said, the Times of India reported.

The court passed the order acting on a plea by Delhi resident Shalabh Nigam, who had bought a flat in the luxury housing project, Greenopolis, Gurgaon in the year 2012. The project was being developed by Orris Infrastructure and 3C company. Nigam had paid Rs 90 lakh against Rs 1 crore, which was the total cost of the flat.

According to the agreement, the flat was to be handed over to him within 36 months, along with a grace period of six months valid from the date of allotment.

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However, when the builders failed to complete the project, Nigam went to NCDRC through advocate Aditya Parolia, seeking either the time-bound possession of the flat or a refund. Since Nigam was interested in taking the possession of the flat, the Commission ordered the builder to finish the construction and deliver the flat, complete in all respects as per the agreement by September 2019 end after getting occupancy certificate.

The Commission also instructed the builder to compensate the buyer at the rate of 6% per year on the total deposit for the delayed period of time even after transferring the possession. Furthermore, in the case of non-delivery of the flat within the prescribed deadline by the Commission, the builder wouldhave to refund the entire amount with a 10% interest.

Also Read:No flats, no vote, say home buyers

The builder, on the other hand, disputed that Nigam had stopped paying instalments and in case the refund is ordered, there will be a forfeit of 10% of the amount as earnest money, which is as per the agreed upon clause. The Commission, however, rejected the argument, saying that the instalments were paid up to the seventh stage and the buyer had discontinued giving further payments as there was no headway in the construction process.

Although in the cases of delayed projects, builders often compensate the buyers according to the clause in agreement ranging from Rs 5-10 per sq feet per month. But, the amount is insufficient considering huge investments by buyers in the properties

Also Read:Big relief for home buyers: GST for under-construction flats, affordable housing slashed

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