\n<\/p>\n
YOUR DEVELOPER DELIVERS A DELAYED APARTMENT OR PAYS FLAT M. SIVARAMAN<\/span><\/i><\/b><\/p>\n Plight \u00a0<\/span><\/p>\n Hard earned money and home loan proceeds are shelled \u00a0<\/span><\/p>\n In this backdrop, \u00a0<\/span><\/p>\n Remedies under Consumer Protection \u00a0<\/span><\/p>\n Such inordinately delayed delivery of possession \u00a0<\/span><\/p>\n Are \u00a0<\/span><\/p>\n But, when builders and developers charged extra for \u00a0<\/span><\/u><\/b><\/p>\n Are Courts ordinarily decide the consumer disputes in \u00a0<\/span><\/p>\n Validity \u00a0<\/span><\/p>\n Typically, the developers and builders usually ring Validity \u00a0<\/span><\/p>\n After an inordinate delay of say two to three years \u00a0<\/span><\/p>\n It has been held by the Supreme Court in a recent
\nCOMPENSATION<\/span><\/u><\/i><\/b> ?<\/span><\/u><\/b><\/p>\n
\nof Apartment Buyers:<\/span><\/u><\/b><\/p>\n
\nout to developers by the consumers in the fond hopes that the apartments, the
\ncommon facilities and other amenities as showcased in the promotional brochure,
\nadvertisements, application forms and the construction agreements would be honoured
\nand delivered in time and as per the specifications promised by the
\ndevelopers.\u00a0 The individual consumers who
\nare not organized when they book the apartments do not stand a chance to the
\nwell organized and advised developers in matters relating to the contractual
\nterms, most of which remain in fine print with elaborate legal drafting tilting
\nthe scales of balance in favour of the developers.\u00a0 Contractual remedies, if any, available to
\nthe apartment buyers against the delay or defaults by the developers in such
\nagreements are either inadequate or illusory in nature.\u00a0 On the other hand, the developers are usually
\ncushioned with various safeguards and favourable terms, often outright denying
\nor utmost capping their overall liabilities with elaborate clauses which can
\nsave them from claims arising out of delays and defaults.\u00a0\u00a0 In practical terms, the individual consumers
\ndo not have any say in the negotiation, finalization and execution of the
\napplication forms for booking the apartment and the construction agreements
\nwhich typically results in one-sided agreement, broadly protective of the
\ndevelopers interests only. <\/span><\/p>\n
\nwhen an individual consumer who was promised an apartment is confronted with
\nhuge delay in delivery of possession and \/ or with the common areas, facilities
\nand other amenities which have been promised are also not ready or do not meet
\nthe contractual specifications, it results not only in financial strain, but,
\nalso leads to emotional stress and mental agony.\u00a0 This is because a residential apartment or
\nhouse is not merely an immovable asset, but, an aspirational ideal in ones\u2019
\nlife.\u00a0\u00a0 When almost all the installments
\ntowards the apartment have been paid out to the developers by the consumers
\nfrom out of their own funds and home loan proceeds, if the possession is not
\nready and inordinately delayed, then, it is double whammy for the consumers,
\nsince on the one hand their monies have been fully paid and the apartment is
\nnot delivered, while at the same time, the loan EMIs would have already
\nkicked-in and in some cases, the consumers may also be constrained to continue
\nto pay rentals till the apartment possession is delivered.<\/span><\/p>\n
\nAct:<\/span><\/u><\/b><\/p>\n
\nand\/or non-availability of the common facilities and amenities as per the
\ncontractual specifications can be a subject matter of a consumer dispute in
\nview of the deficiency of services and\/or defect in the construction on the
\npart of the developers and builders.\u00a0 The
\nindividual consumer can file a consumer complaint.\u00a0 More than one consumers who have a common
\ninterest in the consumer dispute can also file consumer complaint in a
\nrepresentative capacity against the developers\/builders(1)<\/b>.\u00a0 The Consumer Disputes
\nRedressal forums created at the district, state and national level under the
\nConsumer Protection Act are tribunals which usually go by the contractual terms
\nagreed between the parties and do not deviate from the agreed commercial
\nbargain even in the face of one-sided agreements.\u00a0 <\/span><\/p>\n
\nSeparate Car Parking Charges Illegal?<\/span><\/u><\/b><\/p>\n
\ncar parking space in violation of the local state legislation in Maharashtra,
\nthe Supreme Court has held that separate charges for car parking is illegal and
\nnot maintainable(2).\u00a0 <\/b>This position was further explained &
\nreiterated by the Supreme Court(3)<\/b>.\u00a0 However, these arise out of State specific
\nlegislations.\u00a0 For instance, in the State
\nof Karnataka, the Supreme Court has held that separate car parking charges can
\nbe collected by developers as there is no prohibition against the same under
\nthe Karnataka Apartment Ownership Act(4).\u00a0 <\/b><\/span><\/p>\n
\nGrossly One-sided Agreements Legally Valid?<\/span><\/u><\/b><\/p>\n
\nterms of the contractual bargain the parties have arrived at.\u00a0 It was held that when a developer has already
\nagreed in the building construction agreement that in case of delay in delivery
\nof possession he would compensate the buyer of an apartment at a specified per
\nsquare feet rate, then, courts should not overlook such clauses and order
\nfurther compensation; only if there are strong and exceptional reasons,
\ncompensation at a rate more than the contractually agreed rate can be awarded(5)<\/b>.\u00a0
\nBut, if the agreements are highly one-sided and have been drafted to
\nprotect the developers\u2019 interest, then, courts can read down the agreed clauses
\nwhich are the product of an unfair bargain.\u00a0
\nIt was also held that contractual terms cannot be final and binding if
\nthey are one-sided and the consumer was forced to sign on the dotted lines of
\nthe developers; such one-sided, unfair and unreasonable terms in the contract
\nform unfair trade practice by the builder for selling the flats(6)<\/b>. <\/span><\/p>\n
\nof Compensation Clauses favouring Developers<\/span><\/u><\/b>:<\/span><\/p>\n
\nfence their liabilities arising out of delays and defaults in the delivery of
\npossession.\u00a0 In extreme cases, they cap
\ntheir liability that in the event of delay in delivery of possession beyond the
\npromised date and also if there are no force
\nmajeure<\/i> circumstances, only a per square feet rate at say Rs.3\/- or Rs.5\/-
\nper sq. ft. per month for the delayed period would be reduced by them in the
\nsale consideration.\u00a0 This hardly works
\nout as any meaningful compensation to the consumers.\u00a0 But, in extreme cases involving huge delay in
\ndelivery of possession, courts came forward to award just and reasonable
\ncompensation over and above the contractually agreed compensation rate(7).\u00a0
\n<\/b>In such cases, courts provided for payment of compensation at
\ninterest rates, which are higher than the per square feet compensation rates
\nthat the developers may have stipulated in the construction agreements.<\/span><\/p>\n
\nof Denying Right to Protest or Initiate Legal Challenge:<\/span><\/u><\/b><\/p>\n
\nbeyond the promised delivery date, the developer is now ready to deliver
\npossession and also execute deed of conveyance.\u00a0
\nBut, he levies a precondition that you should accept the possession and
\nexecute the deed of conveyance without registering any protest or reserving
\nyour right to initiate legal challenge against delay and damages.\u00a0 In the event you refuse to comply with such
\nprecondition, the developer is not handing over possession nor executing the
\ndeed of conveyance.\u00a0 Ultimately, out of
\nfrustration or out of necessity, you agree to withdraw your claims or the right
\nto protest or initiate any legal challenge against the developer and thereupon
\nonly the developer delivers possession and executes deed of conveyance for the
\napartment in your favour.\u00a0 Subsequently,
\ncan you challenge the act of the builder that he had forced you to withdraw
\nyour protest and legal claims against him?\u00a0
\n<\/span><\/p>\n
\ndecision(8)<\/b> that you can still
\nchallenge the same and secure compensation from the court.\u00a0 But, in the meanwhile, if you have arrived at
\na settlement agreement with the builder and have received some compensation
\nfrom him, which may be presumably of lesser monetary value, then, you will be
\nbound by the same and not be able to challenge against the delay and defaults. \u00a0Suppose, while there has been delay and
\ndefault continuing for quite a long period and in the meanwhile, if you have
\nsold the apartment which is midway in the construction, can your subsequent
\nbuyer or you be able to claim compensation from the developer.\u00a0 It has been answered by the Supreme Court in
\nthe above decision that it is not permissible because the new buyer has come in
\nafter he is aware of the delays and defaults on the part of the developer and
\nthat you have sold out the property with all its rights, title and interest and
\ntherefore both of you cannot claim compensation in such cases.<\/span><\/p>\n