• Property builder is using grace period for property registration and delivery - is it legal?

1) We bought 2BHK apartment from a builder in Hyderabad in March 2016

2) Agreement for sale cum construction was made on 07/03/2016
CLAUSE in the Agreement
"The developer shall deliver schedule B & C property in Phase NOs 1 & 2 on or before 36 months from 30th April 2016 with a twelve months additional grace period
subject to clause 4(a) and 8(vi) in accordance with scheme."

3) Note: 93% payments were made by us as on November 2018

4) Our 2BHK house is in Phase 1

5) The agreement does NOT have mention about Property Registration
 CLAUSE - 4(a) 1.5 % interest rate for delayed payments
 CLAUSE - 8(vi) Customer shall not do/seek for internal modifications to apartments

Question - 1: Builder collected payments with 1.5% interest for delayed payments, there is not grace period for installment payments by Customers. 93% Payments collected without information about property REGISTRATION timeline. Property Registration is NOT mentioned in the Agreement.

Question - 2 : Builder is asking us to refer to the Agreement for Grace Period of 12 months which they did NOT say during agreement. As per law Grace period is allowed?

Question - 3: In month of November 2018 also, Property builder customer care gave information that property will be ready by April 2016. - Can they change now to Grace Period?
Asked 7 years ago in Property Law
Religion: Hindu

2 answers received in 30 minutes.

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28 Answers

You can file a consumer complaint against the said builder before Consumer court

Prashant Nayak
Advocate, Mumbai
34515 Answers
249 Consultations

1) If 93% payment has been made than you can ask to get property registered on your name by via of registration with sub registrar.

 

2) If you have signed agreement to sale and the grace period clause is mentioned than need to fullfill that.

 

3) No they can't change grace period, if they change grace period than they do not have rights to collect interest from buyers.

 

4) If builder does such things you can make complaint in RERA office and in Consumer Forum.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

Builder bound to register agreement  in your favour after more than 25 per cent payment made by you 

 

2) builder can deliver possession of flat within grace period 

 

3) the terms of agreement are sacrosanct 

 

4) you cannot lead oral evidence contrary to documentary evidence 

 

5) in your case possession can be delivered within grace period 

Ajay Sethi
Advocate, Mumbai
99779 Answers
8145 Consultations

Dear Sir,

It is a common problem and delaying tactics of the builder and you may ask for the due compensation and mental agony on this count. No separate clause is required for registration because the occupation can only be given once the registration is done or in hand. 

Ganesh Singh
Advocate, New Delhi
7169 Answers
16 Consultations

1. Under RERA laws, the Builder is entitled to the Grace Period, which should be mentioned in the Agreement. Registration of Agreement is mandatory and a statutory requirement ELSE it is an prosecutable offence.

2. Suggestion: File grievance petition before the local Consumer Court, against the builder, supported with all relevant documentary evidences and photographs, for harassment, delay & negligence and claim damages and compensation.

Keep Smiling .... Hemant Agarwal

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

Dear Sir,

You can ask interest on delay period from date of completion mentioned in registered agreement without considering grace period. In Maharashtra it would be MCLR - SBI + 2%.

It is still not decided by any court or authority.

But you can fight for the same that compensation should be paid from the date of default (without grace period).

further you can refer relevant point of RERA- Rules of your state, because every state has its RERA- rules and draft agreement to sell is mentioned there. No such word “Grace period” in that format.

so, after implication of RERA- no builder can go beyond this format.

e.g. in Punjab RERA- Rules refer para 7.1 of agreement to sell.

Netravathi Kalaskar
Advocate, Bengaluru
4951 Answers
27 Consultations

1. Sir on delayed payments the builder can seek interest as per the agreement the registration has to be done in the timeline as mentioned under the agreement including the grace period

2. Yes grace period is allowed and there is specific condition for same in agreement also so it was upon you to read same as if we go.for same in court then there is specific condition for same in agreement so builder can escape from liability.

3. The builder may extend in the grace period.

 

 

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

It's not covered in rera. As rera law is from may 2017. You will get resolution in consumer court as stated.

Prashant Nayak
Advocate, Mumbai
34515 Answers
249 Consultations

1. Yes as this is agreed under the agreement.

2. See even if the project came in 2016 if it was under construction in 2017 then it must be registered under RERA failing which there should be penalty on builder.

3. See builder shall register property on completion only before same he cannot register the property as along sale he has to give possession letter copy of OC and CC too.

4. Under law and rules also he is liable to register as per agreement and after the OC is received.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

In Maharashtra ownership of flat act 1963 requires builder to execute registered agreement for sale when 20 per cent payment made to builder 

 

2) Section 4 of the MOFA (Maharashtra Ownership of Flat Act), before accepting any payment as advance payment or deposit from a flat purchaser, the Promoter has a liability to execute a written agreement in the prescribed format with every flat purchaser and to get this agreement registered under the Registration Act. Further, the amount of deposit or advance cannot exceed 20% of the sale price.

Ajay Sethi
Advocate, Mumbai
99779 Answers
8145 Consultations

As the project is still not completed, it comes under ambit of Rera and ought to have been registered with Rera

Since it is not registered, you must file a complaint against the builder for not registering his project with Rera 

Also as per Rera, the builder on receiving 10% of sale price has to compulsorily register agreement with buyer

There is no such rule or law which says that registration can be done only after building is completed

The builder is fooling you 

Please file a Rera complaint 

Yusuf Rampurawala
Advocate, Mumbai
7899 Answers
79 Consultations

Hi,

The registration can be done only after occupation certificate and you may claim for compensation against the builder. 

Ganesh Singh
Advocate, New Delhi
7169 Answers
16 Consultations

1. The builder will be referring to the agreement conditions, hence you may have to look for some reason to issue him a legal notice on this.

2. The grace period if found in the agreement, cannot be agitated about at this stage,

3. The builder may use the clause in his favor.

You may have to bear with it.

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

The builder will do the registration of the property only after it is completed and OC has been obtained.

You could have got the agreement registered so that you could have availed loan facilities.

 

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

On account of force majeure conditions due to pandemic builders have been granted 6 months grace period 

 

2) hence builder can register agreement and deliver possession by Oct 2020 

Ajay Sethi
Advocate, Mumbai
99779 Answers
8145 Consultations

If you are dissatisfied with the attitude of your behavior and do not want to continue with the booking owing to the delay in the completion of the construction,  you can always communicate your decision to cancel the booking to the builder in writing and send your intimation by registered post demanding the booking amount with interest from the date of booking accordingly.

If for any reason the builder is not responding or not complying with the demand made then you can drag him to consumer forum for relief and remedy.

However you should become aware that the legal process will take more time than what time the builder requested you to tolerate.

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

Yes you need to send a legal notice and there after you can file a consumer court case for the same

Prashant Nayak
Advocate, Mumbai
34515 Answers
249 Consultations

1. Logically it would be wise to wait till August-2020, more so since in the present lockdown scenario, you not be able to sell or find any buyer.

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

you can file a complaint before consumer court or file a civil suit for specific performence before civil court or file a suit for damages. 

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

See you may request builder to cancel and make refund though if he fails To do same it is better to wait till august for registration as for now there is lockdown national wide and also court case may take long time so if on communication it is settling you can do it but there Won't be any use filing the case.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

Hello, 

Send a legal notice to the builder and thereaffter file the case before the consumer forum 

when you file the case before the consumer forum then in that case the notice will be sent to the builder through the court. 

There is no other process. 

 

Regards 

Anilesh Tewari
Advocate, New Delhi
18103 Answers
377 Consultations

1. If the grace period is also over then you ought to have served a lawyer's notice to the builder to deliver the possession forthwith or refund with interest the money paid to him.

2. It is not clear from your query whether the project is RERA registered.

3. If he does not meet your demands then sue him in the consumer forum to seek refund of money with compensation for mental agony.

Ashish Davessar
Advocate, Jaipur
30840 Answers
981 Consultations

Registration with RERA is mandatory 

 

2) 

As per the provisions of section 3 of the act, all the real estate projects from [deleted] including ongoing projects which are in the extent of more than 500 square meters and more than eight units have to be registered with APRERA.

If any promoter contravenes the provision of section 3, he shall be liable to pay the penalty which may extend up to 10 percent of the estimated cost of the real estate project.

 

3) complain against builder before RERA seek orders to direct builder to refund your money with interest 

Ajay Sethi
Advocate, Mumbai
99779 Answers
8145 Consultations

You can first issue a legal notice to the builder through your lawyer on this and make suitable demands based on the contents of the sale agreement and also the oral assurances from the builder side.

If ther is no response from the builder within the stipulated time in the notice or if he fails to comply with the demands made, you may approach consumer forum for relief and also compensation.

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

you may file a consumer complaint before the NCDRC and simultaneously file a criminal complaint to put additional pressure if sufficient grounds are made out. 

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

You need to do as aforesaid. Fit case for consumer court

Prashant Nayak
Advocate, Mumbai
34515 Answers
249 Consultations

1. Don't send emails any further.

2. Serve a lawyer's notice and then approach the Consumer Forum.

Ashish Davessar
Advocate, Jaipur
30840 Answers
981 Consultations

1. See you proceed with the complaint before consumer forum in relief you may seek for refund along with 18 percent interest and also compensation for the deficiency.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

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