Can you get refund with interest on the money invested in the builder project?

Can you get refund with interest on the money invested in the builder project?

The delay in builder projects in many projects have sparked a debate on getting refund with interest on the money already invested in the builder projects.

In consumer forum one thing is to be proved is there was a delay in the implementation of the project.

Once you have proved that there is a delay in the project you can claim refund with interest on the money already invested in the builder projects.

Arguments on the side of builder

Builder resist such claims by saying that there is no agreement between the consumer and builder for getting interest on the amount to be refunded.

In absence of agreement the consumers are not entitled for any refund.

 

Counter Arguments

Hon’ble Supreme Court has in Alok Shanker Pandey Vs. Union of India &Ors., II (2007) CPJ 3 (SC) held that:-

“It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. For example if A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B.”

The same argument can be applied in the cases where one can seek possession of the property and claim interest on the amount already invested and the consumer was not able to enjoy the property.

Refund already claimed.

If the buyer has already claimed the refund amount.

Then also he can claim the interest on the refund amount even if he has not made any protest

Argument

So far as the question of protest by the complainants while receiving the amount is concerned, any protest on their part would have denied them the benefit of receiving the amount of refund and the prudence at that time demanded that they should first accept the refund and later claim for interest.

Same argument can go with the possession cases. Because at the time of taking possession also the possession can be denied on want of interest.

Conclusion

Therefore interest is your right and you claim interest on the money already invested even after money is refunded to you.

How much compensation under RERA?

How much compensation under RERA?

RERA was enacted for quick redressal of complaints against the builders but compensation under RERA is a concern for many buyers.

In a bid to protect the interest of home buyers as well as weed out non-serious and unscrupulous players from the market, the Real Estate (Regulation and Development) Act, 2016 (RERA) has proposed heavy penalties on builders who will henceforth either delay their projects or won’t comply with RERA norms.

compensation under RERA

For instance, RERA recommends imprisonment for a term which may extend up to three years, or fine which may extend up to 10% of the estimated cost of the real estate project, or both, in case of non-compliance with the Act. Moreover, in case of any structural defects arising within five years of handing over the possession of project to buyers, developers will be liable to rectify such defects without further charge.

Under Section 18 of the Act there are two cases under which the builder is liable to return the money of the buyer.

One case is if builder is unable to give possession as per agreement or discontinuous his business then the builder is liable to pay interest including compensation. What section 18 contemplates that there is no separate compensation awarded to the buyer the interest component includes compensation. In case buyer opts for possession then if there is delay in possession then the buyer will get interest of delay.

 

Compensation under RERA is also there in section 18(2) and 18(3) in which but 18(2) talks about defect in title of land the buyer will be entitled to compensation and under 18(3) also any other violation execept mentioned above.

How much of interest rate?

Many states fixed the rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the State Bank of India highest Marginal Cost of Lending Rate plus two percent.

The interest percentage and the compensation amount (to be mentioned in the agreement of sale at the time of booking) in the case of any default could differ state-wise. Maroo says, “The state governments are vested with the powers to fix the rate.

At present, as SBI’s MCLR is 8%, developers will have to pay 10% interest on the paid amount to the buyers. At the same time, buyers will also pay the same interest at 10% on delayed payment of their dues and not the penal rates of 12% to 18% as mentioned in the sales agreement.

Adv. Nitish Banka

9891549997

 

How to file Builder Complaint under RERA?

How to file Builder Complaint under RERA?

About RERA

RERA is Real Estate Regulation Act-2016 the act was passed with an objective to regulate real estate sector in India. Real estate sector contributes to 9% GDP and is 2nd highest employment generator after Agriculture. There was a need to regulate the sector as there was huge number of builders who have defaulted in their commitment of giving possession of flat to allotees. The real estate scam in India is apparent and need to regulate builders was important an then there are one sided agreements and cheating done by builders

About 67% of projects in Delhi/NCR are delayed by more than 2 Years.

The act has a provision of mandatory registration of Builders and real estate agents and establishment of real estate regulatory authority to look into the matters related to complaint against builders.

A Builder complaint can be lodged in RERA under Section 31 of RERA Act.

SUBMIT YOUR COMPLAINT-HERE

 

Image result for rera

Builder Complaint Before Real Estate Regulatory Authority

Every State in India has RERA and under RERA builder projects are registered there are stringent provisions under which the builder has to disclose details of the project and file sanction plans,completion dates etc before he could even do marketing of the project. There are strict penalty clauses in the act with regards to non-registration of the projects.

Under Section 31 an allotee can approach RERA and can file builder complaint under RERA act. The format of complaint differ from state to state. Here we will evaluating RERA forums of Delhi and NCR.

 

RERA in Delhi

Delhi Rera has interim Regulatory Authority situated at Vikas Minar ITO

Complete Address-:

14th Floor Vikas Minar, ITO, New Delhi

 The webpage of Delhi RERA is http://dda.org.in/rera/

They have online complaint link http://dda.org.in/rera/EncroachDataUpload.aspx

However it is advisible to visit and file complaint under section 31 of RERA act against builders or rela estate agents in Delhi.

RERA in Haryana

In Haryana two RERA authorities are there one in Panchkula and

Haryana RERA Office Address

Real Estate Regulatory Authority Haryana
Executive Officer, RERA, HUDA Complex (Central Block),
Sec-6, Panchkula.
Phone: +91 172-2583132
E-Mail: [email protected]

Click here to download notification

RERA in Gurgaon

The Gurgaon RERA is situated at make shift office PWD Guest house

Haryana Real Estate Regulatory Authority (H-Rera) will be finally set up in Gurugram from February 1, officials said.

The temporary office will start functioning out of the public works department (PWD) guest house on Old Railway Road near the Gurugram police commissionerate. However, the permanent office will come up in Sector 44 six months later.

RERA in Uttar Pradesh

UP Rera has a proper website and a link to lodge complaint

Website http://www.up-rera.in/index

Address

6 J.C.BOSE MARG, LALBAGH,LUCKNOW, Uttar Pradesh

E-mail: [email protected]

Interest and Compensation under RERA

The authority has wide powers for redressal of complaint under RERA hera are some of recent News of decisions by RERA

H-Rera fines Gurugram builder 30 lakh for advertising project without registration

“The authority is of the view that Krisumi Corporation has violated the provisions by publishing the advertisement in the newspapers as well as on the website without getting prior registration of the project from the Haryana Real Estate Regulatory Authority, Gurugram in whose jurisdiction the said project falls and thereby committed the violation of Section 3 (1) of the Act and rendered themselves for action under Section 59 (1) of the ibid Act,” H-Rera chairman Khandelwal observed in the detailed order. Directing the company to pay Rs 30 lakh as penalty for the violations, the authority further observed that such violation would not be allowed.

Source: https://timesofindia.indiatimes.com/city/chandigarh/h-rera-fines-gurugram-builder-30-lakh-for-advertising-project-without-registration/articleshow/63497315.cms

MahaRERA imposes Rs 50 lakh fine on Piramal Realty

Moneycontrol.com06-Apr-2018
“Section 11 (2) of RERA states that the advertisement or prospectus issued or published by the promoter shall mention prominently the website address of the Authority, wherein all details of the registered project have been entered and include the registration number obtained from the Authority and such other matters …

RERA warns builders of action for late registration

Daily News & Analysis16-Jul-2017
We can even take suo motu action against builders who fail to register their projects after the deadline of July 31, on mere intimation about the same,” said Vasant Prabhu, secretary, Maha RERA. “However, we are expecting all the builders to register their projects within the deadline or else we will fine the …

RERA to Mumbai builder: Compensate buyers for delay in giving …

Hindustan Times31-Mar-2018
The Maharashtra Real Estate Regulatory Authority (MahaRERA) in its recent order has rapped a builder who violated construction rules and tried to put the blame of delay in possession of a flat on government agencies. The order also provided relief to homebuyers who were given possession of their …

MahaRera directs builder to refund cash component over delay in …

Times of India20-Mar-2018
MUMBAI: Maharashtra Real Estate and Regulatory Authority (RERA) recently directed a builder to repay with interest Rs 25 lakh including a cash amount of … The Rera Member said that grounds of delay given by the builder, could be treated as mitigating factors to refuse buyer’s claim for compensation.
 
Advocate Nitish Banka
9891549997

 

 

How much compensation under RERA?

RERA was enacted for quick redressal of complaints against the builders but compensation under RERA is a concern for many buyers.

In a bid to protect the interest of home buyers as well as weed out non-serious and unscrupulous players from the market, the Real Estate (Regulation and Development) Act, 2016 (RERA) has proposed heavy penalties on builders who will henceforth either delay their projects or won’t comply with RERA norms.

compensation under RERA

For instance, RERA recommends imprisonment for a term which may extend up to three years, or fine which may extend up to 10% of the estimated cost of the real estate project, or both, in case of non-compliance with the Act. Moreover, in case of any structural defects arising within five years of handing over the possession of project to buyers, developers will be liable to rectify such defects without further charge.

Under Section 18 of the Act there are two cases under which the builder is liable to return the money of the buyer.

One case is if builder is unable to give possession as per agreement or discontinuous his business then the builder is liable to pay interest including compensation. What section 18 contemplates that there is no separate compensation awarded to the buyer the interest component includes compensation. In case buyer opts for possession then if there is delay in possession then the buyer will get interest of delay.

Compensation under RERA is also there in section 18(2) and 18(3) in which but 18(2) talks about defect in title of land the buyer will be entitled to compensation and under 18(3) also any other violation execept mentioned above.

How much of interest rate?

Many states fixed the rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the State Bank of India highest Marginal Cost of Lending Rate plus two percent.

The interest percentage and the compensation amount (to be mentioned in the agreement of sale at the time of booking) in the case of any default could differ state-wise. Maroo says, “The state governments are vested with the powers to fix the rate.

At present, as SBI’s MCLR is 8%, developers will have to pay 10% interest on the paid amount to the buyers. At the same time, buyers will also pay the same interest at 10% on delayed payment of their dues and not the penal rates of 12% to 18% as mentioned in the sales agreement.

Adv. Nitish Banka

9891549997

Real Estate Scam in India

Real Estate scam in India

In India many thousands of people have invested in on going projects by many builders in the country. Now these projects are under construction and are available at low rates. since possession of the projects are offered within 36 months period from the date of builder buyers agreement. Here is the twist.

Image result for real estate scam

Projects getting delayed.

Now if the project is delayed there is no security for consumers about their investments.only remedy available is to go to consumer forums. which have lot of pending cases. on an average a consumer case takes 4–5 years that means 4–5 years is easily granted to these builders. plus if builder loses he again can appeal at higher forums.citing hidden clauses in agreement he can fool the consumers.Even the penelty clauses are one sided and even if the consumer wins and spending 10+ years in litigation he is still a loser as he would get petty compensation which he has already lost as a interest of whatever he has invested and builder in 10+ years has gained 1000’s of customers like the consumer who has won the case. Plus cost and time is again is on consumer therefore many people don’t approach courts.

What these builders do is they divert the funds of one project to another project and again to another project. with flashy advertisement many get allured and invest heavily in these under construction project.

The builder construct a project till the skeleton of building is ready and later will stop the work to engage the labor to other project for first two years a consumer may think fast pace construction is going on and all of a sudden everything stops as at this stage the builder has collected 90% of money while only 10pc is actually been spent and rest diverted to new project.

There is another scheme like builder pays EMI or rent till possession. people allured by such schemes take huge bank loans, for few months builder pays emi and then when he stops paying the EMI, the banks comes after you.

Thousands of people are victims of this and when this end under the new bankrupcy code the builder declare himself bakrupt and foolish consumers will remain victims.

Remedies.

There are very limited remedy and that is only options buyers have one is

These days NCDRC is entertaining petition under section 12(1)(c) (class action petition) of the consumer protection act-1986, wherein joint petition can be filed on behalf of innocent consumers.

Pre-Requisites

  1. All the buyers are affected by same cause.
  2. Same relief is sought by the buyers
  3. There are many number of buyers.
  4. Grievance related to same project
  5. No default on part of buyers-All payment made

If all the conditions are fulfilled the complaint is eligible for one under 12(1)(c) of the consumer protection act 1986.

About Complaint

As per the judgement of Ambrish Kumar Shukla

A complaint under Section 12 (1)(c) of the Consumer Protection Act can be filed only on behalf of or for the benefit of all the consumers, having a common interest or a common grievance and seeking the same / identical relief against the same person. Such a complaint however, shall not be deemed to have been filed on behalf of or for the benefit of the consumers who have already filed individual complaints before the requisite
permission in terms of Section 12(1)(c) of the Consumer Protection Act is accorded.

Therefore the prayer clause have to be drafted keeping in mind that it is for the benefit for all the consumers or else the complaint will be rejected.

The content of the complaint must also not be a single party centric it should speak for all the consumers.

After the complaint is admitted in the forum any consumers who wish to proceed against the builder can file an individual application for impleadment with affidavit.

More than one complaints under Section 12(1)(c) of the Consumer Protection Act are not maintainable on behalf of or for the benefit of
consumers having the same interest i.e. a common grievance and seeking the same / identical against the same person. In case more than one such
complaints have been instituted, it is only the complaint instituted first under Section 12(1)(c) of the Consumer Protection Act, with the requisite
permission of the Consumer Forum, which can continue and the remaining complaints filed under Section 12(1)(c) of the Consumer Protection Act
are liable to be dismissed with liberty to join in the complaint instituted first with the requisite permission of the Consumer Forum.

RERA

this law is introduced and has put strict regulations on builders.

It is advisable not to invest in under construction projects in India its a scam and collectively reach consumer forums for redressal it would put pressure on builders.

Investing in real estate is a big scam

Adv. Nitish Banka

Advocate Supreme Court of India

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