• Interest on delayed possession as committed in allotment letter

I booked a flat from reputed developer in mumbai in year 2015 and have since paid 100% consideration. As per allottment letter developer had committed to pay interest if possessoion is delayed beyond 30th September 2018. After 95% payment was released we entered in to an agreement for sale in month of November 2018. In agreement for sale, builder has conveniently changed the possession date to 30th September 2020. Builder during registration of Project in maharera also captured the possession date as 30th September 2020. As we had already paid 95% of consideration, we proceeded with the registration of agreement for sale . During the stage wise payments, there was a slight delay in release of few installments, for which builder has charged us 15% interest. Can builder charge higher interest rates on installments that got delayed prior to Rera becoming applicable for project? Or as RERA being applicable to the project interest if at all charged, has to be as per RERA guidelines for entire duration of Project. Is it possible to recover the interest from developer on delayed possession as committed in allotment letter.
Asked 6 years ago in Property Law
Religion: Hindu

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11 Answers

you are entitled to interest for delay in possession 

 

2) builder can charge interest for delayed payments by flat purchaser at 2 per cent above SBI marginal cost of lending rate 

 

3) after coming into force of RERA only rate of interest as mentioned in RERA act can be charged for delay in making payment 

Ajay Sethi
Advocate, Mumbai
99867 Answers
8149 Consultations

Yes, as per builder buyer agreement terms before RERA came into force.

After RERA, as per RERA rules.

You should claim interest for delayed possession on the basis of previous BBA ?

What was the need to execute agreement to sale when delivery date was expired.

 

Yogendra Singh Rajawat
Advocate, Jaipur
23084 Answers
31 Consultations

Builder can charge till society not formed but it has to be reasonable. 


One sided contracts are over ruled.

Yogendra Singh Rajawat
Advocate, Jaipur
23084 Answers
31 Consultations

you dont need builder NOC for sale of flat 

 

2) once sale deed is executed duly stamped and registered builder has no right , title interest in flat 

 

3) once society is formed society can charge only Rs 25000 as transfer charges 

Ajay Sethi
Advocate, Mumbai
99867 Answers
8149 Consultations

Interest for delay payment is to be charged for post RERA period at the prescribed rate which in most of states is 2% above lending rate of banks. 

For delay in delivery of possession in accordance with the term of agreement for sale

1) you can withdraw from the project and be entitled to get refund of all payments made to the builder along with interest at the prescribed rate including compensation.

Or

2) if you wish to continue with the project, you shall be paid by the builder, interest for every month of delay till the handing over the possession at such rate at may be prescribed.

Every Allottee shall take physical possession with in two months of the OC issued. 

Kallol Majumdar
Advocate, Kolkata
2837 Answers
14 Consultations

1. Builder is bound by the possession date earlier informed to you in the allotment letter

2. you are not bound by the possession date stated in your registered agreement

3. therefore you can very well claim interest for delayed possession from promised date of possession till actual handover of possession 

4. secondly you need to check in your agreement what is the quantum of interest payable by the builder if he delays in handing over possession to you? Is it the same rate of interest which would apply to you had you made any delays in payment of the installments on their due dates?

5. if there is any disparity between the rates of interest payable by you and the builder for the respective defaults of either party, then obviously builder cannot charge you ROI over and above the ROI which you would be required to pay him had you made a delay in payment on the stipulated date of payment

6. coming to the NOC charges, the terms are completely illegal. If the OC is received and possession is given to the flat buyer then builder has no business to charge any NOC or transfer fees. That is completely illegal

7. if the OC is not yet received I suggest you file a RERA complaint to claim interest for delayed possession + excess interest charged from you for delay in making payment of intallments 

Yusuf Rampurawala
Advocate, Mumbai
7904 Answers
79 Consultations

Separate charge can not be levied for the NOC by the builder 

Also if there is a change in date of possession as submitted by the builder before RERA you may go ahead and file a claim before MAHARERA and may claim compensation for the delay that has been caused by the builder. 

 

Regards 

Anilesh Tewari
Advocate, New Delhi
18103 Answers
377 Consultations

Send a legal notice to the builder and thereafter file a case against him before the MAHARERA. 

 

Regards 

Anilesh Tewari
Advocate, New Delhi
18103 Answers
377 Consultations

You can Complaint to rera they will issue proper directions to builder in the same

Prashant Nayak
Advocate, Mumbai
34581 Answers
249 Consultations

The latest supreme court judgment on this says tht the builder canot have one sided agreement i.e., an agreement favoring his side alone .

"A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder." The Supreme Court has held that the incorporation of one-sided clauses in a builder-buyer agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986. The bench comprising Justice UU Lalit and Justice Indu Malhotra also observed that a builder could not seek to bind a flat buyer with one-sided contractual terms.

Perusing the agreement, the bench found that there are stark incongruities between the remedies available to both the parties to the agreement. For instance, the Agreement entitles the Builder to charge Interest @18% p.a. on account of any delay in payment of installments from the Respondent – Flat Purchaser. Whereas, the Builder is liable to pay Interest @9% p.a. only for delay in delivering possession of flats.

So based on this judgment also you can claim interest at par with the rate he charged you for the delayed possession.

 

T Kalaiselvan
Advocate, Vellore
90069 Answers
2500 Consultations

You are right that the builder cannot charge NOC CHARGES AT THE RATE QUOTED BY HIM.

 

A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder."You can drag him to consumer forum for relief and remedy.

 

T Kalaiselvan
Advocate, Vellore
90069 Answers
2500 Consultations

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