• Interest charged on delay in construction

Hi, 

I had booked a property in Mumbai with Sunteck Builders and accordingly paid the booking amount on Nov 2013. During the time of booking and as per the schedule of payment. Construction was expected to be completed by Dec 2017 latest. Post payment of booking, I also paid the towards allotment by Jan 2014. 

There was another demand letter on February 2016 towards commencement of excavation, which was also paid. Along with this demand there was an interest charged by the builder saying there was delay in paying the money towards allotment. The revised date of completion of project is now Dec 2019

The builder has started charging interest even for 1 day of delay. I have not yet entered into a formal agreement with the builder so far. Does the builder have the right to charge interest when the property is delayed by almost than 2 years ? Can I claim interest from the builder towards delay in constructing the property, similar to the way he is charging interest on delayed payment. Secondly, I had asked the builder to share the copy of the agreement, which he has declined saying I can read the agreement in his office, if I want. If I need to sign the agreement, shouldn't I get a copy of the agreement. 

I believe charging interest is unfair since the construction has got delayed for two years and the builder should be paying money against the delay.

Do I have a case which can be fought in the court ? Please advice
Asked 7 years ago in Property Law
Religion: Hindu

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6 Answers

1) if builder is charging you interest for delay in making payment builder is liable to pay interest for delay in delivery of possession

2) the rate of interest should be sane which is recovered by builder from flat purchasers

3) builder is bound to furnish you copy of agreement in advance so that you can have it vetted by your lawyer

4) sign agreement only after reading the fine print

Ajay Sethi
Advocate, Mumbai
95223 Answers
7612 Consultations

5.0 on 5.0

Hi, You have to file a complaint in the consumer redressal forum for unfair trade practice and also ask for interest for the delayed possession. Fist you have to issue legal notice and then file a consumer complaint.

Pradeep Bharathipura
Advocate, Bangalore
5607 Answers
336 Consultations

4.5 on 5.0

2. The builder is at fault from many counts.

So there's nothing to worry.

File a case before the consumer forum where you will get refund of excess payments along with damages and compensation.

Good luck

Devajyoti Barman
Advocate, Kolkata
22921 Answers
498 Consultations

5.0 on 5.0

Without a signing an agreement the agreement or contract is not valid and null and void.

The builder is supposed to hav furnished a copy of the agreement to you without which you cannot know the terms and conditions.

If the builder is charging interest for delayed in payment then he is obliged to pay interest towards delay in construction too.

You can issue a legal notice to the builder demanding execution of registered sale agreement, copy of the sale agreement, interest for the period of delay in completion of construction.

If the builder is not responding or complying with the demand made, then he can be dragged to consumer forum for deficiency in service and also for compensation for mental agony.

T Kalaiselvan
Advocate, Vellore
85424 Answers
2239 Consultations

5.0 on 5.0

1)send an email to builder that you need a draft copy of agreement

2) only after it is approved by your lawyer would you sign the agreement

3) you can file complaint against builder before consumer forum and seek orders to direct builder to pay you interest for delay in delivery of possession to furnish copy of draft sale deed in advance .

Ajay Sethi
Advocate, Mumbai
95223 Answers
7612 Consultations

5.0 on 5.0

You can take the help of an advocate practicing in Mumbai to file the consumer case agaisnt the builder for his unilateral and arrogant rules. He cannot say that he cannot provide the sale agreement copy or the terms and conditions of the sale agreement. You get a reply to this effect in writing by first sending him a legal notice demanding the same. After that you can initiate the legal process through consumer forum.

T Kalaiselvan
Advocate, Vellore
85424 Answers
2239 Consultations

5.0 on 5.0

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