What To Do If Housing Project Is Endlessly Delayed?
Hopes of thousands of homebuyers who have been patiently waiting for the Supreme Court (SC) to give them justice have taken a severe beating. It has been hearing cases involving India’s major real estate developers, including Amrapali, Jaypee and Unitech, for two years now without being able to find any solution. These homebuyers had already spent several years waiting for their homes before they approached the apex court, seeking justice. In a scenario such as this, what could be the most logical thing for a homebuyer, who used all his savings relying on the fact that they would soon be able to move out of their rented accommodation, to do?
The right strategy
Knee-jerk reactions could only aggravate the troubles if you have been at the receiving end of a project delay. Whatever your modus operandi may be, it has to be well thought-out. Your plan must be chalked keeping in consideration your specific case.
As a buyer, you have two options — to wait for the project to complete or to seek refund and exit. Depending on your specific case, one of these two options has to be picked.
When does it make sense to wait?
If case your developer is a well-known name in the industry with a good record, you have a better chance of getting the delivery even though your patience has been tested. The realtor may be able to weather the storm if it has hit him in the form of mild financial stress. Exiting the project at this juncture may not be advisable for a buyer since that would amount to a good deal of money and effort going down the drain. Rankled you certainly may be because of the developer’s failure to keep his end of the bargain, it would still be wise to stay still in your own interest.
Big developers who have entered into a full-fledged financial turmoil are a different story altogether though.
When does it make sense to seek refund?
When the group was at the peak of its career, Noida-based Amrapali Group had the then Indian cricket team skipper Mahendra Singh Dhoni endorsing it. It has so happened that Dhoni is currently suing the beleaguered realtor for monetary losses of Rs 150 crore. No respite is in sight for over 42,000 homebuyers, who are waiting for the apex court to for over two years now to reach a verdict.
In such a scenario, delivery of homes would be delayed interminably, and getting a refund could be a buyer’s best shot at getting some relief. This money could then be invested in a ready-to-move-unit if the buyer is doubly pressured because of paying rent as well EMI month after month.
In their frustration, buyers also often stop paying the EMI for long-delayed projects.
Hundreds of buyers, who had booked homes in various projects of Jaypee and had paid over 80 per cent of the unit cost when the developer was dragged to the insolvency tribunal in 2017 stopped paying their EMIs. That the developer would have a legal authority to forfeit their earnest deposit and their CIBIL scores would take a severe beating for stopping the EMI payment was a fear not many of them had the luxury to feel.
In such cases, such buyers cannot be proven guilty of doing anything illegal, the fact that the terms of the builder-buyer-bank agreement state differently notwithstanding.
In various rulings, the SC and the national consumer forum have said neither developers nor lenders could take adverse action against buyers who have been made to suffer because of long delays.
A buyer’s best bet in a terminally sick housing project is to get his refund, to put it succulently. This money could then be invested in a ready-to-move-in unit where the need for wait, something the buyer already dreads, does not arise at all.