When a New Delhi based homebuyer approached a consumer court to file a case against the developer who did not deliver the project on
the promised date, she did not know that consumer courts to admit cases involving
possession of property or any kind of delay in construction.These cases are
taken up by the civil courts. In the above mentioned example, the customer has
already paid 95% of the total cost of the property, but is still to get possession.
The matter is sub judice.
Like our friend from New Delhi, many homebuyers do not
know that such cases do not come under the purview of consumer courts. However,
delay in construction is not the only problem that homebuyers face.There are
other cases such as deficiency in services at various points even after
possession of flat, where you can seek help of consumer courts. Here's a list
of some such problems in which you can take the developer to the consumer
court.
Construction defects and maintenance:
There could be variations from what you were promised, in
the final design of the apartment. If you do not get the same design or outlay
as mentioned in the advertisements or shown in the sample flat, it is a
deficiency in services on the developer's part.
Even poor construction quality can be the basis of a
consumer complaint where you can drag the developer to a consumer court.
"For the first year after possession, the builder is liable to take care
of damages such as leaks in water pipes or cracks in the walls. If he refuses
to do so, you can lodge a complaint with the consumer court." Says Rajesh Goyal,
Managing Director, RG Group, a New Delhi-based real estate firm.
Also, it is the developer's responsibility to maintain
parks, parking spaces, clubs and other such amenities for the first three-five years.
However, in case he is not doing the same, you can ask for a refund of the
amount that. you have already paid at the time of buying the property. If he
acts stubborn, you can drag the lover to the consumer court.
Escalation Clause:
The price of the flat can go up, though marginally, during
the course of construction. This can happen any time during the construction.
If you look at the agreement paper signed with the developer, you will find a rise-and-fall
or alteration clause which allows the developer to take a unilateral decision
on price change during the course of construction. Though price changes depend
on various factors such as demand and supply in the housing sector, home loan
rates or prices of raw materials, the clause doesn't mention the range of price
rise. "There is nothing much that you can do about the change if you have
signed the builder-buyer agreement." Says Snehdeep Agarwal, Director,
Bhartiya Group, a real estate firm with projects in Bangalore. However, if the developer
is not able to justify the reason for a hike in price, you can seek help.
Misuse of common areas:
The developer cannot sell the open spaces within the
premise for setting shops and offices. Selling of common spaces of the complex
may take away the extra space that you have paid for. It has been observed in the
past that developers sell common spaces without the permission of the resident’s
welfare association. Even setting up telecommunication towers on the roof of
building need permission of the residents in writing.
Delay Compensation:
Although the property possession cases are taken up by civil courts, you can approach the consumer court if the developer fails to pay
you the delay compensation charges in such cases. Most builder- buyer
agreements have a delay- compensation clause. According to this clause, an
amount at the rate of, say, Rs.5-7 per sq.ft has to be paid to the homebuyer in
case the property is not delivered on scheduled date.
Case Hearing:
The hearing in consumer courts is taken on a fast-track
basis. You may get a judgement in a single day if all the necessary documents
are in place. If the court finds the developer guilty, it orders a compensation
amount that he needs to pay to you. The Consumer Protection Act, 1986, provides
a three-tier system of redressal agency - first, at the district level known as
the district forum; second, at the state level known as the state commission; and
third, at the national level known as the national commission. These forums deal
in matters of real estate as well as consumer goods.
"A consumer can file complaint in the district forum
of the district concerned where the value of goods, services and compensations,
if any, up to Rs.20lakh. He can approach the state commission for cases
involving sums of money between Rs.20lakh and Rs.1crore, and the national commission
for more than Rs.1crore." Says Sunder Khatri, a Delhi- based lawyer
practicing in the Supreme Court.
There is provision for appeals against orders of a
particular forum by the aggrieved party before the next higher forum / commission
and even from the findings of the national commission before the Supreme Court.
How to go about it:
Approaching a consumer court is fairly simple. In fact
you do not even need a lawyer for filing a case in a consumer court. You can
write your problems in a piece of paper and send it to the court through post. In
your note, you need to mention the problem and the name of the person who is responsible
for the deficiency in service. Says Khatri, "While, you should address the
particular court and mention the subject is one line at the start of your application.
Following this you should mention all the facts of your complaints under
section 12 of the Consumer Protection Act."
Most importantly, it is a must to mention the
compensation amount in terms of money that you want as refund from the
developer. However, you need to justify the amount with proper documents, adds
Khatri. If you name the developer, the court will summon the same. The
developer may appoint a representative to appear in the court on his behalf. If
your case is an old one, you can ask for an increased amount of compensation
based on the fact that property rates have also increased over the period.
However, before you approach the consumer courts, discuss
the issue with the developer. In most cases, developers would want to avoid legal battle and would want to solve the matter outside the court.
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