2 min
21 September 2024
Buying a home is a dream for many. It is not just about having a roof over your head; it is about security and comfort. But what happens when the builder does not deliver your home on time? This is where the RERA rules for delayed possession come into play.
1. Regulatory approvals: Delays in getting important regulatory approvals can slow down the process of issuing possession certificates. This can create significant delays in handing over properties to buyers. Because these approval processes take time, they can greatly affect when buyers can actually move in.
2. Contractual disputes: Disagreements between builders and their contractors or subcontractors can complicate and slow down construction projects. These disputes may lead to extended negotiations, which can affect the expected timelines for buyers to take possession of their properties.
3. Financial constraints: Builders facing financial difficulties often struggle to complete projects on time, resulting in delays in delivering possession to property buyers. Lack of funds can slow down construction progress and the planned possession schedules.
4. Force majeure: Unforeseen events, such as natural disasters or political instability, can disrupt construction activities and are beyond anyone's control. These force majeure events can cause unexpected delays, affecting the completion schedules of projects and, in turn, the timelines for property possession for buyers.
1. Legal options for delayed projects under RERA
According to Section 31 of RERA, if a buyer is unhappy with a builder, they can file a complaint with the authority or an appointed adjudicating officer. Homebuyers can also complain about real estate agents if needed.
Section 79 states that civil courts cannot handle disputes related to RERA matters. Only the adjudicating officer or the appellate tribunal can address these disputes. However, consumer forums (national, state, or district) are still allowed to handle complaints. Section 71 allows a complainant to withdraw their case from the consumer forum and file it with the adjudicating officer if it relates to certain issues.
RERA gives home buyers the option to request either interest for delayed possession or a full refund of the money paid, including interest. If the builder does not comply with this, they could face serious penalties, including imprisonment or cancellation of their registration.
As per Section 18(1) of RERA, if the builder delays possession or does not complete the project on time as stated in the sale agreement, they must return the buyer's money along with interest at a rate of 10% on the amount paid. If the builder fails to do so, they may face imprisonment, a fine of up to 10% of the project’s estimated cost, or both.
If a builder changes the possession date without agreement, the buyer can withdraw from the project and request a refund within 45 days. If the buyer does not withdraw, they can still receive compensation for the delay in the form of monthly interest until possession is handed over. This interest should be automatically paid by the builder from the start of the delay. If there are any issues, the buyer can approach the authority for assistance.
2. Legal options outside RERA
Under the Consumer Protection Act, 1986, home buyers can file a complaint for deficiency in services if they experience issues with their property. This means any faults or problems in the quality of service provided by the builder.
The National Consumer Disputes Redressal Commission (NCDRC) has ruled that buyers can ask for a refund if possession of their house or flat is delayed by more than one year. Depending on the property's value, buyers can take these steps:
This penalty continues until the builder hands over possession of the property. It is a way to hold builders accountable and ensure they deliver on their promises.
Here are a few reasons why you should apply for a home loan from Bajaj Housing Finance:
1. Low interest rates: Ensuring that your EMIs are easy on your pocket. This means you can save more over the loan tenure, allowing you to keep funds for other essential expenses or investments.
2. Long repayment tenure: Choose a tenure that suits your financial situation. Whether you prefer shorter terms for quicker ownership or longer terms for lower monthly payments, you have the freedom to customise your repayment plan.
3. Quick approval and disbursal: Get access to funds swiftly without long waiting times. This ensures that you can grab opportunities as they arise in the property market without unnecessary delays.
4. Simple application process: A smooth application process from start to finish. With minimal paperwork and clear guidelines, you can complete your application easily, making the journey to homeownership smooth and straightforward.
By choosing Bajaj Housing Finance, you can take the next step toward owning your dream home, with a loan that works for you. Whether you are buying an under-construction property or a ready-to-move-in home, Bajaj Housing Finance provides tailored solutions to meet your needs.
Understanding RERA
The Real Estate (Regulation and Development) Act, commonly known as RERA, was enacted in 2016 to protect home buyers’ interests and regulate the real estate sector. One critical aspect addressed by RERA is the issue of possession delays. When a builder fails to deliver a property within the agreed-upon timeframe, home buyers face significant challenges. In this article, we explore RERA rules related to possession delays, the penalties imposed on builders, and how home loans play a crucial role in mitigating the impact of such delays.Possible reasons for delay in possession
There are several common factors that can lead to delays in property possession for buyers, including:1. Regulatory approvals: Delays in getting important regulatory approvals can slow down the process of issuing possession certificates. This can create significant delays in handing over properties to buyers. Because these approval processes take time, they can greatly affect when buyers can actually move in.
2. Contractual disputes: Disagreements between builders and their contractors or subcontractors can complicate and slow down construction projects. These disputes may lead to extended negotiations, which can affect the expected timelines for buyers to take possession of their properties.
3. Financial constraints: Builders facing financial difficulties often struggle to complete projects on time, resulting in delays in delivering possession to property buyers. Lack of funds can slow down construction progress and the planned possession schedules.
4. Force majeure: Unforeseen events, such as natural disasters or political instability, can disrupt construction activities and are beyond anyone's control. These force majeure events can cause unexpected delays, affecting the completion schedules of projects and, in turn, the timelines for property possession for buyers.
Steps to take if there is a delay in property possession
If you experience a delay in property possession, consider the following steps:1. Legal options for delayed projects under RERA
According to Section 31 of RERA, if a buyer is unhappy with a builder, they can file a complaint with the authority or an appointed adjudicating officer. Homebuyers can also complain about real estate agents if needed.
Section 79 states that civil courts cannot handle disputes related to RERA matters. Only the adjudicating officer or the appellate tribunal can address these disputes. However, consumer forums (national, state, or district) are still allowed to handle complaints. Section 71 allows a complainant to withdraw their case from the consumer forum and file it with the adjudicating officer if it relates to certain issues.
RERA gives home buyers the option to request either interest for delayed possession or a full refund of the money paid, including interest. If the builder does not comply with this, they could face serious penalties, including imprisonment or cancellation of their registration.
As per Section 18(1) of RERA, if the builder delays possession or does not complete the project on time as stated in the sale agreement, they must return the buyer's money along with interest at a rate of 10% on the amount paid. If the builder fails to do so, they may face imprisonment, a fine of up to 10% of the project’s estimated cost, or both.
If a builder changes the possession date without agreement, the buyer can withdraw from the project and request a refund within 45 days. If the buyer does not withdraw, they can still receive compensation for the delay in the form of monthly interest until possession is handed over. This interest should be automatically paid by the builder from the start of the delay. If there are any issues, the buyer can approach the authority for assistance.
2. Legal options outside RERA
Under the Consumer Protection Act, 1986, home buyers can file a complaint for deficiency in services if they experience issues with their property. This means any faults or problems in the quality of service provided by the builder.
The National Consumer Disputes Redressal Commission (NCDRC) has ruled that buyers can ask for a refund if possession of their house or flat is delayed by more than one year. Depending on the property's value, buyers can take these steps:
- For properties worth up to Rs. 20 lakh, file a complaint with the district commission.
- For properties valued between Rs. 20 lakh and Rs. 1 crore, submit your complaint to the state commission.
- For properties over Rs. 1 crore, contact the national commission.
How is the penalty calculated?
The penalty amount is usually mentioned in the sale agreement. It is often calculated as a percentage of the total amount paid by the buyer. For example, if the agreement states a penalty of 10% of the paid amount per month, and you paid Rs. 50 lakh, the penalty would be Rs. 5 lakh for each month of delay.This penalty continues until the builder hands over possession of the property. It is a way to hold builders accountable and ensure they deliver on their promises.
Why is this important for home buyers?
- Financial protection: The possession delay penalty provides a financial cushion for buyers. If a builder delays possession, the penalty compensates for potential rent or alternate housing costs that the buyer may incur.
- Encourages timely completion: Knowing that they will have to pay penalties encourages builders to complete projects on time. This accountability helps maintain trust between builders and buyers.
- Legal recourse: If builders do not pay the penalties, buyers can file complaints with RERA. This offers a clear path to seeking justice.
Home loan considerations
Delayed possession can cause several problems. First, you will still need to pay rent for your current home. If you have taken a home loan for the new property, you will also have to pay the EMIs. Here is how delayed possession impacts a borrower and what steps you can take to reduce the risk.- Look into the builder's background and read reviews to see if their past projects were finished on time.Consider getting a home loan for a project that is already approved by the bank.Make sure to collect copies of key clearance documents, like the land use certificate or any necessary NOCs.
Explore Bajaj Housing Finance Home Loan
If you find yourself in need of a home loan, consider Bajaj Housing Finance Home Loan. With Bajaj Housing Finance, you not only get the benefits of competitive interest rates but also a transparent process that gives you peace of mind. This means no hidden charges, clear terms, and expert support whenever you need it. If you are a first-time home buyer or looking to upgrade to a bigger property, Bajaj Housing Finance Home Loan offers everything you need for a smooth home-buying journey.Here are a few reasons why you should apply for a home loan from Bajaj Housing Finance:
1. Low interest rates: Ensuring that your EMIs are easy on your pocket. This means you can save more over the loan tenure, allowing you to keep funds for other essential expenses or investments.
2. Long repayment tenure: Choose a tenure that suits your financial situation. Whether you prefer shorter terms for quicker ownership or longer terms for lower monthly payments, you have the freedom to customise your repayment plan.
3. Quick approval and disbursal: Get access to funds swiftly without long waiting times. This ensures that you can grab opportunities as they arise in the property market without unnecessary delays.
4. Simple application process: A smooth application process from start to finish. With minimal paperwork and clear guidelines, you can complete your application easily, making the journey to homeownership smooth and straightforward.
By choosing Bajaj Housing Finance, you can take the next step toward owning your dream home, with a loan that works for you. Whether you are buying an under-construction property or a ready-to-move-in home, Bajaj Housing Finance provides tailored solutions to meet your needs.
