Consumer Connect: 'Builder, Buyer Cannot Agree On Possession Without OC,' Says Expert

Consumer Connect: 'Builder, Buyer Cannot Agree On Possession Without OC,' Says Expert

The questions are answered by Adv. Shirish V. Deshpande, Chairman – Mumbai Grahak Panchayat.

FPJ News ServiceUpdated: Monday, May 06, 2024, 10:14 AM IST
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Consumer Connect | FPJ

My friend booked a 2BHK for Rs1.9 crore in May 2018. The date of possession was December 31, 2021. He has so far paid Rs1.5 crore. However, the builder has failed to give possession. My friend therefore filed a complaint in MahaRERA in December 2023 claiming possession and interest for the delayed period. The builder is now offering a flat by saying that he has applied for OC, which is expected in three or four months. He has also insisted that my friend withdraw the complaint from MahaRERA, and is willing to offer compensation of Rs50,000 for the delay. Will it be safe to withdraw the complaint and accept possession without OC?

Alka Jogalekar, Goregaon (East)

Legally no builder can offer a flat without valid occupancy certificate. Even in the agreement for sale the builder is required to provide a clause that the promoter shall give possession of the flat upon obtaining the OC. As per Sec 11 (4) of RERA, the promoter is under obligation to obtain such OC before giving possession of flats. Interestingly, under Sec 19, RERA also lists obligations of the homebuyers besides their rights. In particular, Sec 19 (10) states that the allottee (i.e. the homebuyer) shall take physical possession of the flat within two months of the OC being issued. Thus, it will be illegal on the part of the builder to offer the flat without the OC and it will be equally illegal for the homebuyer to accept the flat without OC.

As far as the compensation of Rs50,000 offered by the builder is concerned, it’s peanuts. RERA makes it mandatory for the builder to pay interest on the amount paid by the homebuyers at the rate of MCLR + 2% per annum for the delayed period. Even if you assume this rate at 9 % to calculate interest on Rs1.5 crore already paid, the amount will be Rs13.5 lakh per year of delay. Hence it is neither advisable nor legal nor fair for your friend to accept this offer and withdraw the complaint.

I had booked a flat in a redevelopment project way back in January 2013. I paid Rs50 lakh for a flat costing Rs70 lakh. I was given a letter of allotment by acknowledging payment of Rs50 lakh. Simultaneously, I was given a buyback letter by the builder, which was valid for one year and which gave him the right to buy back this allotment letter by returning my amount with interest at the rate of 18% to 36% over the period stipulated therein. The builder did not buy back my allotment letter within the said period of one year. However, he credited a sum of Rs40 lakh in my account in December 2021. When I enquired in writing about this amount, the builder did not reply. He has also not executed the agreement for sale despite collecting more than 50% of the flat price. Now, after a long delay of more than 10 years, the building is ready with OC. However, he is not giving me possession of the flat saying I have no right over it.

Vaishnavi Subramaniam, Vikhroli

It is certainly a unique and strange case where a builder is issuing allotment letter and at the same time also issuing a buyback letter to buy back that allotment letter and offering to refund money with incredible interest rates. You should have smelt a rat at that point itself. From the facts narrated by you, I see that the builder has accepted more than 20% of the flat cost without entering into an agreement for sale, which is in gross violation of MoFA. At least after enactment of RERA, the builder ought to have executed the agreement for sale.

With RERA coming into force, no builder can accept more than 10% of the flat cost before executing agreement for sale. If the builder did not respond to your queries about his crediting Rs40 lakh in your account, you should have rushed to MahaRERA at that time itself.

Since you have not provided the nature and exact contents of the so-called buyback letter, I am unable to comment on the merits of your case. It will be in your interest to immediately file a complaint in MahaRERA against this builder and seek injunction against him from selling, transferring the said flat to any one else, pending final disposal of your claim for the flat with interest for delayed period and compensation.

(Advocate Shirish Deshpande is chairman, Mumbai Grahak Panchayat. Queries may be mailed to shirish50@yahoo.com)

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