RERA directs developer to pay interest to home-buyers for delay in handing flat

In a huge relief to at least seven home buyers, the Maharashtra Real Estate Regulatory Authority (MahaRERA) directed a developer to pay interest for delayed possession by three years. The RERA bench acted on a complaint filed by seven home buyers regarding delayed flat possession even after them paying at least 90 per cent of booking amount.

At least seven home buyers had purchased flats in the building Satya Lifestyle Phase II at Palghar. These home buyers had filed complaints against the developer Satya Lifestyle Private Limited regarding delayed flat possession and non-issuance of Occupation Certificate to them. One of the complainant Devendra Singh said the project was executed after signing the registered agreement of sale.

“The possession date given by the developer was December 21, 2014. A grace period of at least six months was also granted after which the possession date was June 30, 2015. Till now, the possession of the flats has not been handed over to the allottees,” said Singh.

Hence, the complainants demanded interest for delayed possession under section 18 of the Real Estate (Regulation and Development) act of 2016.

The advocate Pooja Pahuja who represented the developer argued that the project was launched in 2011 with the intention to construct low cost houses for lower income group.

Pahuja said the project got delayed due to repeated amendments in the Development Control Regulations (DCR) in 2012 and 2013. This led to the plans being held up

At least seven home buyers had purchased flats in the building Satya Lifestyle Phase II at Palghar. They buyers had filed complaints against the developer Satya Lifestyle Private Limited regarding delayed flat possession and non-issuance of Occupation Certificate to them

before the competant authority, restriction on extraction of river sand for construction purpose.

Pahuja also said there were financial difficulties due to non availability of sand and market rate slowed the sale of remaining units. After the DCR amended, the plan was changed which further delayed the project work.

“The reasons for delay are covered under force majeure clause mentioned in the agreement. This entitles us to extend the date of possession. We are ready to hand over the possession of the flats to the allottees between June to July 2018,” said Pahuja. The RERA bench found that there is delay in handing over the possession of the flats to the home buyer as per the registered agreement signed between both the parties.

“The DCR rules were amended in 2012 in which the concept of fungible Floor Space Index was introduced. This changed all the sanctioned plans. Yet, the developer has not been able to explain the particular permission which delayed the project by three years," stated the order.

The bench also stated that the other reasons including the restriclion on sond extraction ond current market scenorio has not provided reasonoble grounds for delay in the project.

“There was adequate time for the developer to complete the project and handover the possession of the said flat even before the RERA act coming into effect in May 2017,” stated the order. Thereby, the bench directed the developer to pay interest to the allottees for delayed possession at the prescribed rate under RERA act if 2016 and on the amount paid by him from May 2017.