Have you been cheated out of a bigger flat?
If you get a smaller apartment after paying the developer for a bigger one, he is liable to refund the excess amount to you
As per the prevailing market practice in the real estate sector, residential flat/apartments are sold on the basis of built- up area ( BUA). Consideration towards the apartment/flat/house is payable to the builder based on the area of such apartment/flat/ house. At the time of booking/ allotment, the area of apartment offered by the builder is usually based on the existing building plans. However, subsequently due to certain changes in building plans, necessary structural changes or for other reasons, the actual area handed over to the buyer may differ from the area promised to him in the buyer’s agreement.
As a common practice, the buyer’s agreement executed between a builder and a buyer usually contains a clause that if the area promised exceeds a specified percentage, then the buyer has to pay the additional consideration. Where the area decreases by a specified percentage, then the differential amount shall be adjusted by the builder against the final sale consideration. But in cases where the BUA delivered is less than the agreed area, many buyers have alleged that builders rarely refund the excess amount or adjust it against the final consideration paid by the buyer.
It is also pertinent to mention that even if there is no clause in the agreement mentioning the refund of excess amount/ adjustment of excess amount by the builder against the final consideration, the buyer would still be entitled to a refund of the proportionate excess amount paid to the builder if the BUA handed over by the builder is less than the area offered/promised by the builder in the buyer’s agreement.
This position was also upheld by the National Dispute Redressal Commission (National Commission) in its judgment pronounced in 2012.
In the case, the consumer/ complainant was originally offered a flat having a built-up area of 714 sq ft. The built-up area was also clearly defined i n t he buyer’s ag reement. After handing over possession of the flat, based on an architect’s report, who had taken the measurement of the flat, the complainant discovered that there was a shortfall in the BUA of the flat and the BUA handed over was only 565 sq ft as against the BUA of 714 sq ft in the agreement.
The buyer/complainant filed a complaint before the district consumer dispute redressal forum (district forum), alleging that she had paid the entire amount of consideration but had been given a reduced builtup area.
The district forum ignored the architect’s report that the buyer had relied upon on technical grounds. The buyer filed an appeal before the state consumer dispute redressal commission, Maharashtra State Commission. The State Commission, in order to ascertain the true f acts, appointed an independent government registered valuer and chartered engineer and architect as court commissioner to measure the flat.
The court commissioner submitted in his report that as per the agreement, the built-up area of the flat was to be 714 sq ft but the actual built-up area of the flat in possession of the complainant was of 573.83 sq ft only.
The State Commission subsequently allowed the appeal of the buyer and directed the seller/ builder to refund the excess amount to the buyer along with interest and also awarded compensation due to mental agony along with the cost of the proceedings.
The seller/builder filed a revision petition before the National Commission, challenging the order of the State Commission. H o w e v e r, the National Commission upheld the order of the State Commission in favour of the buyer holding that there is no illegality, infirmity or material irregularity in exercise of its jurisdiction in the order passed by the State Commission, which calls for interference in revisional jurisdiction.The revision petition was accordingly dismissed.
This case clarified the position that in the event the area handed over to a buyer is less than the area offered/promised by the builder in the buyer’s agreement, the builder is liable to refund the excess amount charged from the buyer/consumer.
The challenge, however, is that very few buyers actually verify the BUA of the apartments/ flats/ house sold and handed over by the builder.
Homebuyers should verify the built-up area of the flat handed over by the builder before moving in