Your father should issue B legal notice to pay balance amount
2) if he refuses file suit to direct B to pay balance amount with interest as per terms of building agreement
3) your father cannot cancel agreement unilaterally
UDS Registered Building Contract Signed but Customer not paying
Hi Team, My dad is a small apartment promotor. He purchased a land under my mothers name and planned to build and sell 8 1BHK apartments. One customer Mrs A agree to buy one unit. So my dad collect the land portion of the money and registered the UDS . Mrs A gifted the land to her Son Mr B My dad ( builder ) entered into an Building agreement with Mr B. Building was completed 3 year back but Mr B is refusing to pay the balance and take possession of the apartment. As they were distant relatives my dad was patient with the payment and did not issue any formal notice to Mr B to pay. My dad had to put his own money and complete the building as he had to handover to other buyers. What options does the builder have in this matter. Builder is unable to rent the property as its not on his name . But the apartment is under his possession. Mr B can not take possession as he has not paid the building contract How to cancel the UDS ? is this even possible. due to the fact they did not pay and go ahead with the building contract. Thank you in advance for your advice Regards Prabhu
Asked 4 years ago in Property Law
Religion: Hindu
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18 Answers
Hi Ajay, By cancelling the building contract via the option you have mentioned what happens to the UDS? as there is no relation to the building contract and UDS. Thank you
Asked 4 years ago
I advised you to sue B to recover amount payable as per building agreement signed by the parties and not cancel the contract
B is owner of land bought by his mother
you can offer to buy back portion of land owned by B
Hi Ajay, I think in the building contract my father has put a clause if the building is not completed by a certain date he will pay Mr B rs2500 per month till handover. In the building contract he has a clause for charging interest if the payment is delayed. As my father did not make a formal demand for payment Mr B can claim my father next asked for payment. Plus due to the delay Mr B can claim compensation of Rs2500 per month for the last couple of years. which will be the entire amount owed to us. If this issue does not get resolved or takes a couple of years, who is the owner of the Apartment and who has the right to use it? Can my father rent it under an unregistered lease. Thank you
Asked 4 years ago
Your father cannot rent the apartment
it is necessary to peruse building contract agreement to advice
litigation is long drawn and expensive proposition
amicable settlement is best option
offer to buy back the land sold to A and subsequently gifted to B
If the landowner breached the construction agreement and is not ready to comply with the conditions then the builder/promoter can issue a legal notice demanding the owner to pay the balance amount and take possession within a stipulated time mentioned in the notice.
If the owner is not complying with the demands made or not responding then a suit for recovery of the amount along with interest can be instituted against the landowner
If A had transferred the land by gift to B, then B is the owner of the land therefore you cannot take possession of the land already sold to A, you can claim only the amount you have incurred for constructing the building as per construction agreement.
Since the building has already been constructed as per the construction agreement, the contract cannot be cancelled at this stage, you can only claim recovery of the amount towards the construction expenses incurred by you along with the interest to that extent, failing which you can seek attachment of the property.
Since it can be termed as just a construction contractual agreement, your father cannot take any action beyond the conditions stipulated in the agreement.
Since the landowner did not make any demand towards the interest for delay in construction, the construction contractor need not think about that aspect while filing the suit for recovery.
Let the landowner claim that money which should be challenged based on the documentary evidences in your possession.
Your father cannot rent out the premises which do not belong to him.
1. Money for the land portion has been collected by your father and the UDS has been registered.
2. Now, your father has entered in to an agreement with Mr.B for developing the land (constructing building thereupon) on certain terms.
3. The said development/building agreement is required to be perused and the terms and conditions are required to be checked for suggesting you properly.
4. If it is mentioned any where that the developer can sell it off or at least let it out to recover the dues in case the owner of the land refuses to pay it, then your father can act accordingly.
1. The UDS has already been registered and the ownership of the land has already been transferred in favour of Mrs. B.
2. Your father's concern now will be on the building only which has been constructed on the land owned by Mr.B and receipt of the payment as per the building agreement for constructing the said building.
1. Your main question is 'who will be the owner of the building constructed by your father if the owner of the land does not pay for the construction as ber the agreement?'.
2. Your father shall have to file a Recovery Suit from Mr.B for not paying the amount as per the agreement and pray for an order to sell the property to a third party in case Mr. B fails or refuses to make the payment within a period as stipulated by the Court.
Dear Sir
You cannot unilaterally cancel the UDS.
Send a legal notice to Mr B directing him to pay the remaining amount.
If he refuses to pay even after the legal notice, you can initiate recovery proceedings before the court.
If you do not wish to put in many years for a court case, you can alternatively settle the matter outside court through mediation.
Thank you
More UPDATES for clarification We tried 1. Give ample time ( couple of years ) to pay the balance of construction amount and register their apartment to Mr B 2. When Mr B said due to hardship in the business they are unable to pay and they were willing to sell the land back to my dad. Trusting them my dad has given them additional amount as compensation but after collecting the money they don't want to register back the UDS 3. We have exhausted the amicable settlement process as the intension of Mr B is I am the UDS owner so immaterial of the delay you will have to sell ( i have to buy) the apartment to me ( MR B ) only 4. Mr B is thinking if the matter is dragged for a few more years then he can settle for the old agreed contruction cost while the apartment has doubled in value In the Building Contract, there is a clause to state "if the building" was not completed on a certain date my dad ( Builder ) would pay them rs2500 as rent per month. there is also a clause to state Mr B has to pay the construction amount in 6 equal payments if not we can claim interest for the outstanding amount But there is no mention in the building contract to say if you don't pay within a certain period you ( MR B ) will have register the UDS back to the owner ( my mother) Clarifications : 1. What options does the builder have in this matter? from a legal solution via the courts 2. Builder is unable to rent ( via a registered agreement ) the property as its not on his name . But the apartment is under his possession. 3. Can Mr B can take possession apartment without paying and registering the apartment on his name. 4. Who owns the apartment? 5. Because Mr B owns the UDS does he have the right to enter the building ? 6. Can Mr B put a case against my dad stating the builder has unlawfully built the apartment in spite of him not paying the construction cost 7. We are happy to go down the long legal path if we have the grounds to win
Asked 4 years ago
B cannot take possession of apartment without paying and registering agreement in his name
2) as on date B is not owner of apartment
3) B can enter the building
4) no case is maintainable by B as he has failed to pay apartment costs
5) sue B to recover construction costs
Hi Ajay, If B is not the owner of the specific apartment then how does he have access to enter the apartment ? is there anything we can do stop them from entering the finished apartment . Thank you
Asked 4 years ago
File suit to direct B to pay balance amount
seek injunction restraining B from entering the apartment
1. The builder can file a suit for recovery of the construction cost along with an application seeking attachment of the property before judgment for the purpose of security.
2. The builder cannot rent it out because that will become fatal to his case stating it as an illegal activity.
3. It is his property hence he can.
4. B owns it.
5. B is the owner.
6. No. The agreement is a proof.
7. You have no option than to approach court for remedy and relief.
B has become the owner of the constructed apartment.
Just because he has defaulted the payment for construction, he cannot be denied entry into the flat.
Dear Sir,
A suit can be instituted by the builder for recovery of construction costs and also file for attachment of the property.
You can seek an injunction against B from entering into the building
1. & 2. The builder shall have to file the Recovery Suit claiming the amount invested in the construction which has not yet been paid by Mr.B, with interest, damage and cost.
3. Unless the possession of the apartment is given by the builder, Mr. B can not forcibly take its physical possession.
4. Ordinarily, the owner of the land is the owner of the building constructed thereupon. However, at the present stage, the development agreement plays a great role to hold the possession of the building by the developer.
5. Your mother shall have to obtain a stay order under order 39 rule 1 & 2 of CPC, restraining Mr.B to enter in to the building till the Recovery Suit is disposed of.
6. Such case will have no merit since there is a construction agreement signed by him.
7. You have a very good chance to win the case.
1.Ordinarily Mr.B is the owner of the building which has been constructed upon his land.
2. Your shall have to file the Recovery Suit and also an application under order 39 rule 1 & 2 of CPC praying for an order restraining Mr.B to enter in to the building till the Recovery suit is disposed of. .
You can go for suit of specific performance against B and recover your amount. You can also cancel the UDS unilaterally and sell the same to another buyer if required.
