What Legal Actions Can Be Taken In Case Of Builder Delay In Property Delivery?

The Indian real estate sector has witnessed considerable development over the years, but with the growth came quite a few problems like delayed possession of property, which is a common complaint among homebuyers. Most of the time, this situation occurs due to mismanagement of funds on the builders’ end, regulatory delays, or direct negligence from them. In this direction, there are many legal provisions and forums available in India that protect homebuyers.

Legal Actions for Builder Delay in Property

In India, homebuyers can approach several legal frameworks and authorities to obtain remedies for delays in possession. These are:

Real Estate Regulation and Development Act, 2016

Enacted to ensure transparency and accountability in the real estate industry, RERA is indeed one of the most effective remedies against delay in the delivery of properties.

Some Important Provisions Under RERA

All projects shall register with RERA. All details about timelines shall be furnished by builders.

In case of delay in delivery of property by the builder beyond the specified timeline, the buyer could:

• Withdraw from the project and receive a complete refund plus interest. 
• Continue working on the project but insist on payment for the postponement.  

Steps to lodge a complaint

• Visit the respective RERA website for the particular state. 
• Complete the complaint form with the necessary details, including information about builder and project and proof of the agreement. 
• Pay the fee and submit the complaint. 

Advantages

• Fast tracking of resolution. 
• The punishment for builders may include fine and imprisonment.

Consumer Protection Act, 2019

The Consumer Protection Act defines “consumers” as those who purchase a home. These buyers can file a complaint in consumer forums if services fall short, e.g., delayed property delivery.

Features

• Commissions for forums are classified into the District, the State, and the National, depending on the claim value.
• Compensation as per buyers claims for loss incurred, mental agony, and many other damages is available.

Procedure

• Make a complaint regarding the deficiency of service, together with documents, like the agreement and correspondence with the builder.
• Submit it before the appropriate forum.

Time frame for Resolution

It takes months to years for consumer forums to resolve the disputes, based on their complexity.

 Civil Court

A homebuyer will sue the builder in a civil suit for breach of contract. A civil court makes a judgment along the following lines:

• Command fulfilment of the contract.
• Compensate for delay. 

Limitations

• Civil cases are lengthy and expensive. 
• Going through court would probably take a number of years.

Criminal Complaint

In case of deceitful activities or frauds, a buyer can file a case against the builder under:

• Bhartiya Nyaya Sanhita (BNS) Section for cheating (Section 318) and criminal breach of trust (Section 316).
• Registration of police complaints or filing a criminal complaint in court proceedings.

Insolvency and Bankruptcy Code, 2016 (IBC)

A home-buyer can file an insolvency proceeding against the builder under IBC provisions by applying to NCLT if the builder is insolvent.

Highlights

• Homebuyers are called financial creditors in IBC.
• Rights entitlement to participate in CoC (Committee of Creditors) meetings to protect their interests.

Documents Required for Filing Complaints

• Deed of sale or builder-buyer agreement 
• Payment receipts and transaction details. 
• Correspondence with the builder (emails, letters). 
• Proof of project registration under RERA (if applicable). 
• Advertisements or brochures that mention delivery timelines.

Common Challenges and How to Address Them?

• Procrastination in the judicial proceedings: Choose forums like RERA which are quicker than the general courts.
• Refusal by builders: Pray for interim relief from the court stopping the builder from transferring assets.
• Lack of awareness: Get enlightened about rights under RERA and other laws.

Steps to Avoid Builder Delay in Property Delivery

• Check RERA Registration: Investigate the registration of the project under RERA, as well as the builder’s reputation before investing in any project.
• Scrutinize the Agreement: Search for an explicit clause or clauses regarding delivery schedules and delays penalties.
• Don’t Get Pulled into Pre-Launch Offers: Choose projects that have all approvals and are currently making physical progress in construction.

Timely delivery of property proves to be less than stress-free and chaotic emotionally as well as financially for the home buyer’s home. But, with the legal mechanisms and forums available in India, the buyer can depend upon one or the other efficient ways of redress. It is necessary to keep informed, maintain all transaction and communications records, and sue when necessary. Laws like RERA and IBC, along with judicial precedents, have given home buyers to hold builders liable and demand justice.

One can talk to lawyers from Lead India for any kind of legal support. In India, free legal advice online can be obtained at Lead India. Along with receiving free legal advice online, one can also ask questions to the experts online free through Lead India.