Didn’t get loan because of builder’s fault?
Allotment of apartment cannot be cancelled if the buyer is denied a home loan because of the builder’s failure to provide relevant documents to the bank
Amajority or people w a n t i n g t o i nve s t i n proper t i es t ake home loans from b a n k s . To s a n c t i o n s u c h loans, banks usually require certain documents related to the project for which the loan is being sought. These include approved building plans, sanction of scheme of projects etc. At times, the bank gives inprincipal approval f or t he loan to the buyer on the condition that the buyer submit to it the requisite documents. There are, however, instances when the builders do not share the documents with the buyer in time, because of which, the buyer cannot get the loan sanctioned from the bank, as a result of which he or she cannot pay the balance amount. In such a scenario, does the builder have the right to cancel the allotment of the buyer? After all, it was the builder who had not handed over the requisite documents to the buyer.
The National Commission had the occasion to deal with such an appeal wherein a buyer’s allotment was terminated by the builder due to negligence of the builder (who failed to provide the former with the requisite documents for sanction of home loan).
The buyer had booked two apartments in a project and had approached a bank for a home loan. The bank had given the go-ahead for the loan but said it required documents of sanction of scheme and approved building plans of the project. The builder initially agreed to provide the documents, but later did not do so. Due to this, the bank stopped the disbursal of the loan. Consequently, the buyer could not pay the balance price of the two flats to the builder who unilaterally cancelled the allotment of the buyer.
Agrand mansion, over a 100 years old, which is said to have been used as a hideout by Pandit Nehru in the Raj days, is on the market in Mumbai. Just off the tony Napean Sea Road area, Laxmi Niwas was built by a Parsi family from Old Bombay in 1904, was sold to the Kapadia family , who made their fortune in the cotton trade, just 10 years later.
Laxmi Niwas has witnessed glorious moments from India’s past – hosting historic figures such as Pandit Jawaharlal Nehru, Ram Manohar Lohia, Aruna Asaf Ali, Achyut Patwardhan and Jayprakash Narayan. Between 1942 and 1945, it was counted as one of the “safe houses,” a hideout for these political figures during the British Raj. According to Nand Kapadia, one of the owners of Laxmi Niwas, “Pandit ji (Nehru) used this house as his hideout during India’s pre-independence era.
The buyer approached the State Consumer Redressal Commission and filed a complaint against the builder for terminating the allotment of the buyer. The State Commission held that the buyer should be entitled to avail the housing loan facility for payment of balance amount towards the flats and directed the builder to hand over copies of the requisite documents within a period of 15 days from the date of passing the order. The State Commission also directed that on receipt of payment of the balance consideration, the Jinnah would also operate undercover from Jinnah House, wh i c h i s j u s t a stone’s throw away; ; while Gandhiji too o used another house in the neighbourhoodd for his political campaigns. aigns. My father who wass just 10 then, tells me he useded to act as a messenger boy, deliveringivering messages between various homes in the neighbourhood to avoid suspicion.” Jayprakash Narayan corresponded with Gandhiji via letters while staying here. During that time many princely states had their palaces on this street including Bikaner Palace, Kutch Castle, Wakaner House, etc.
When it was built, Laxmi Niwas j ust had t wo fl oors. The second floor was added a few years later. The 20,000 sq feet bungalow sprawled over grounds of 1,865 sq metres.
Turn-of-the-century design styles such as high ceilings of 16 to 17 feet (in fact, the second floor is as high as the ninth floor of an adjacent building) overhanging portico verandahs, shuttered builder had to execute sale deed for the flats booked in favour of the buyer. He (builder) was also told to pay compensation to the buyer for the harassment and mental agony suffered and pay costs for wrongful termination of the apartments booked. The State Commission also held that if the builder failed to pay compensation within two months, the builder would further be liable to pay interest at the rate of 9% per annum on the amount of compensation to be paid to the buyer.
T h e bu i l d e r t h e n c h a l - lenged the order of the State 4 wooden window frames, and extensive grounds add to the old world charm of the mansion. The ceiling also has solid teakwood beams with turn-of-the century flooring, with small tiles making up the design. A lion head sculpture, visible at both ends of the terrace and also near the water outlet on the first floor balcony, is representative of Victorian architecture. The peacock and horse sculpture in front of the house mimics wooden architecture from Gujarat and is built in plaster.
International property consultant CBRE has been appointed as the sole advisor for this transaction to assist with the marketing and sale through a structured process and closed Commission before the National Commission, which upheld the order of the State Commission, observing that it had rightly concluded that as per the facts and circumstances of the case, the builder could not have illegally terminated the allotment and consequently dismissed the appeal of the builder.
Even the new le gislation enacted recently, the Real Estate (Regulation and Development) Act, 2016, requires the builders to submit documents to the competent authority at the time of making application for registration of the real estate project, 3 bid.b “The rarity of such independent residences coming on the market has rresulted in considerablee enquiries anand interest,” says NikhilNik Bhatia, MD, CBRE Capital Markets. Talking about f inding the right bubuyer, Bhatia says, “Once the fifiner points and unique nuances of a home have been identified, then it is about aligning these with what the increasingly discerning pool of buyers is seeking. But the true art is in how you can help the prospective buyer to understand the value of the property and the lifestyle it represents.” High net worth individuals seeking discretion and more importantly, those who seek privacy, prefer to buy independent houses as opposed to staying in penthouses within high-rise developments, he adds.
This is one of the last bungalows on this road and with most others being transacted and some of them being converted to a highrise. A few other bungalows closeby include Dubash House and Maheshwari House. such as copy of approvals, commencement certificate, sanctioned plan, layout plan and specifications of the proposed project etc. The chances of the builder not providing the requisite documents to the buyer on time are likely to be further reduced now. 1 2 5
The mansion has turn-of-the-century design styles such as high ceilings of 16 to 17 feet Overhanging portico verandahs in the mansion The 20,000 sq feet bungalow is sprawled over grounds of 1,865 sq metres Shuttered wooden window frames add to the old world charm of the property When it was built, Laxmi Niwas just had two floors. A lion head sculpture, visible at both ends of the terrace