Defaults Committed By Developers And Their Remedies

With a large-scale construction activities taking place, disputes between buyers and developers, too, have increased manifold. This has led to a spike in legal battles. There are various platforms through which one can seek redressal, depending on the grievance of the homebuyer. PropGuide lists seven such common complaints of home buyers and its remedy.

Sub-standard work

In one of its orders, the Supreme Court held that if a developer uses poor quality material in the construction of a building or makes misleading representations about the condition of the house, it is the denial of the facility or benefit to the consumer.

In such cases, the allottee can file a complaint in the consumer forum pleading deficiency in services. In many cases, the forums have ordered developers to remove defects and compensate buyers. Alternatively, the buyer can also file a civil suit claiming damages for breach of obligations.

Construction without approvals

In cases where land has been sold without taking necessary approval of the layout plan resulting which timely possession could not be given to the allottee, the consumer forums have held that such an act deficiency in service on the part of the developer. In such cases, the develop can file a consumer complaint or a civil suit to seek refund and compensation.

Construction on illegal land

If the building has been brought up on illegally acquired land, the allottee can approach the consumer forum or the civil court to claim refund or ask or an alternate accommodation by the same developer. The apex court has held that advertisements inviting applications for allotment without having title to the land was unfair trade practice.

Change in land use or layout plan without the approval of the allottee

If the developer plans to undertake additional construction, which is not part of the original layout plan, he must get the consent of the allottee. In case the developer makes the changes, the allottee can send him a legal notice. If the developer does not respond, the allottee can file a complaint in the consumer forum or a civil suit. The allottee can also file a complaint before the Competition Commission of India if the developer is a dominant entity in the market.

Hidden charges

If as a buyer, the allottee is overburdened by the excessive hidden charges, he can file a civil suit. Alternatively, he can also file a complaint before the Competition Commission of India (if the develop is a dominant entity in the market) to plead that the developer is misusing his position.

Cancellation of booking or project

Many cases have been reported where after receiving the booking amount the developer has cancelled the booking or the project. In such a scenario, the allottee can send him a legal notice. If no solution emerges, the allottee can file a complaint in the consumer court or a civil case against the developer. A criminal case may also be filed.

Forfeiture of amount

The terms and conditions incorporated in the agreement between the developer and the buyer determine the refund of the booking amount. If the contract contains a clause that the developer has the right to forfeit certain percentage of the booking amount, there is no legal recourse. But, if the agreement does not contain any such clause, the allottee can issue a legal notice to the developer.
In one of its judgments, the consumer court has held that if the request for refund by the allottee is on the ground of considerable delay in possession of the apartment, the buyer can approach the consumer court seeking compensation at 18 per cent interest rate.