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

HT Estates - - HTESTATES - Nam­rata Kohli Nam­rata Kohli Su­nil Tyagi Nam­rata Kohli


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


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