Introduction

Buying a home, for a person, is the result of years of planning and savings. It is an investment, a security which represents stability. When there is failure on the part of the builder to handover the possession on the date promised, it can create an emotional and financial disturbance to the individual. For a person coming from middle class, or lower, the payments as to the loan begin, the rent continues, and the future seems uncertain. The Indian law, for such default, provide several legal remedies to protect the people buying homes, ensuring that the builders and developers are held accountable for their actions and commitments.

What Causes Delays as to Possession of the Property

Delay as to the possession of a property from the side of the builder can happen due to several reasons. Mostly, the developers blame the government authorities for the delay cost while seeking regulatory approvals as the construction projects require different sorts of permissions and delay in these approvals can affect the time period under which the possession was to be given. Disputes between the contractors and the developers can also be considered as a reason which may cause delay. 

Unexpected circumstances, such as natural disasters or events not under anybody’s control can also lead to interruption in construction activities. However, in all these circumstances, the developers have to communicate to the buyers, the updated time period in which the possession will next be given.

The Regulations Protecting Homebuyers

The most relevant legislation when it comes to the legal framework for the protection of homebuyers is the Real Estate (Regulation and Development) Act, 2016, or RERA. Under RERA, the developers are required to register the projects and comply with the commitments towards buyers. They must also clearly mention the date as to the completion in the sale agreement. If they fail to deliver the position within the given amount of time, the homebuyers have the legal remedy as to compensation, a refund, or even the interest on the amount paid by them. Let’s discuss it in detail.

Right to Interest or Refund for the Delay

One of the strongest legal remedies available to the homebuyers is the right to refund or interest on the amount paid in case of delay in giving possession on part of the developer. Under Section 18 of RERA, there are two options available to a buyer. 

First, to withdraw from the project. When this happens, the buyer would be entitled to the complete amount paid to the builder or developer with interest and certain compensation as per the matter. The law requires the developer to refund this money within the time limit given.

Second, to not withdraw from the project and wait for its completion. If this option is chosen, the builder will have to pay interest for every month of the possession being delayed. This is because the law recognises that the buyers face additional expenses while waiting for the possession of their property. 

Filing of a Complaint with RERA

Another legal remedy available to the buyers facing delayed possession is that they can file a complaint with the authority of RERA under Section 31. The authority holds the power to examine the issues between the builders and the homebuyers, and then issue orders accordingly.

When the matter is subjected to certain compensation, RERA authorities appoint an adjudicating officer to conduct the enquiry. The purpose of the same is to efficiently resolve such matters while ensuring that the buyers are given proper relief. In case the developer does not act in compliance of the order passed by the authority, penalties might be imposed. 

Legal Remedies under the Consumer Protection Act

The remedies available to the homebuyers are not confined to RERA alone. They are open to seek relief under the Consumer Protection Act, 2019. The complaint can be filed before various consumer forums, depending on the monetary value of the property. 

Under the Act: 

• The jurisdiction is of the District Commission to deal with cases involving properties of worth upto Rs. 1 crore. 
• The jurisdiction is of the State Commission to deal with disputes involving Rs. 1crore to Rs. 10 crore.
• The jurisdiction is of the National Commission to deal with cases exceeding Rs. 10 crore.

However, the legal remedies under the CPA does not barre the buyers from moving to RERA. They can choose any of the forum which they believe is suitable for their case. 

Proceedings under the Insolvency Law

Under the Insolvency and Bankruptcy Code, 2016, the homebuyers are considered to be the financial creditors of the builder. Which means that they can take legal action against the developer. However, when it comes to such proceedings, it needs to be a group effort. A few buyers, to be precise, a minimum of 100 allottees or 10% of the total buyers, which ever is lower, must come together to file the case. Under this law, the project can also be transferred to another developer so that it can be finished. 

Bharatiya Nyaya Sanhita, 2023: Criminal Action as to Fraud or Cheating

In many situations, delays may be caused due to certain fraudulent activities by the builder. If the developer intentionally makes false promises to the buyer about the project or mislead them in any other manner, criminal action can be taken against them. Complaints can be filed under the Bharatiya Nyaya Sanhita, 2023 for offences, such as fraud, cheating, or criminal breach of trust. The defaulters or fraudulent might face serious consequences, such as heavy fines and even imprisonment. 

Conclusion

The law in India provides for different remedies to protect the interest of the homebuyers. Possession of a property, when delayed can cause financial as well as emotional pressure upon the buyers. Understanding the legal rights available to them, helps them to take appropriate steps when they face such delays. It also ensures that the developers at default are held accountable for the commitments they made. These creates a legal balance when it comes to property disputes in India.