• Maintenance charge on a redevelopment project

My property (one shop and one room) in the redeveloped project was ready for posession from July 2007. We took the posession immediately but the OC was issued in 2009 for the building. The Co-op Housing Society was formed in Aug 2016.

Due to some dispute (where supposedly I might be at fault), I didn' t pay the maintenance charges since the posession of the property. It was mentioned in the agreement that after the posession, the tenant has to pay the MC and property tax to the builder and it will be subject to revision as per the new co-op society.

Since then, the redeveloper alleges that he has been paying the MC and tax on my behalf since 2007 and now has charged interest on the same @ 24%. Above that he is charging compund interest @ 24% semi-annually from 2017 to 2021 (from the formation of CHS).

He has also modified the MC for the shop to Rs.4510 compared to the agreement done before construction which was Rs.2150. The MC for the room was left blank in the agreement but still signed by my dad and other parties but now mentions its MC as Rs.1450.
 

The amount is summing upto 65 lacs. He says pay 5 lacs in cheque and rest in cash.
Asked 1 month ago in Property Law
Religion: Hindu

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11 Answers

As per law you are liable to pay maintenance not from the date of possession but from the date of OC 

Because without an OC the possession will be illegal 

So you have to pay the arrears since 2009 

Charging interest on arrears is ok but charging interest on interest and that too compound interest is illegal and draconian 

There is no need to pay any cash of Rs 60 lacs as any transaction in cash above 2 lacs is illegal and the recipient has to pay double the amount of cash received as penalty to the government 

If the builder has any claim against you then he has to file a suit against you to recover the amount 

He cannot orally ask for 65 lacs like this 

As regards the MC for the room, you need to check if others are also charged at the similar rate 

Yusuf Rampurawala
Advocate, Mumbai
6638 Answers
63 Consultations

5.0 on 5.0

Is there any clause in agreement to pay 24 per cent interest 

 

2) builder can charge simple interest but not compound interest 

 

3) no need to make payment in cash 

 

3) claim of builder prior to 2018 is barred by limitation 

 

4) I presume you have not made any acknowledgement of liability 

Ajay Sethi
Advocate, Mumbai
85546 Answers
5730 Consultations

5.0 on 5.0

Dear client, 

this seems tricky as the agreement has already been signed by your dad and other parties. All can try to negotiate with them on this and then if it doesn't work, send a legal notice. 

Thank you 

Anik Miu
Advocate, Bangalore
3311 Answers
34 Consultations

4.9 on 5.0

You can refuse to pay the exorbitant demand made by the redeveloper.

If he issues a demand notice, you may issue a detailed reply denying his allegations and also refuse to pay him the amount which is exorbitant.

Let him go to court or apply due process of law for recovery, which can be challenged properly in court of law because the demand cannot be made beyond 3 years besides he cannot demand compounded rate of interest at his whims.

The way he demanded the 60 lakhs by cash itself indicates that his demands are illegal hence you can stubbornly refuse to pay him even a single paise, let him proceed legally 

T Kalaiselvan
Advocate, Vellore
75676 Answers
1313 Consultations

5.0 on 5.0

No, he can't charge you compound interest 24% as per MCS act. 

Maximum 21% simple interest he can charge you and that also to pay in society and builder can collect from society. If he has handed over building to society.

Ganesh Kadam
Advocate, Pune
12219 Answers
167 Consultations

4.9 on 5.0

Don't pay such illegal demand and never pay the same in cash component. Contest the same before competent authority

Prashant Nayak
Advocate, Mumbai
25386 Answers
65 Consultations

4.4 on 5.0

- The said demand of the redeveloper is against the law ,and after forming the society they cannot claim any maintenance except the society. 

- Further, if the said developer filed a case against you , then also beyond 3 years of period h cannot recover any amount from you legally. 

- You can file a complaint before the Consumer forum . 

Mohammed Shahzad
Advocate, Delhi
8791 Answers
94 Consultations

5.0 on 5.0

Builder cannot charge interest at 24 per cent unless there is clause to that effect in your agreement with builder 

 

2) if builder refuses to register shop in your name file complaint against builder before RERA or consumer forum and seek orders to direct builder to register shop and room and deliver possession 

 

3) you cannot recover cash payment t made to builder 

 

4) part payments made would be adjusted against outstanding dues 

Ajay Sethi
Advocate, Mumbai
85546 Answers
5730 Consultations

5.0 on 5.0

1. The builder cannot claim interest or arrears of maintenance amount beyond three years of time from the date of his claim.  It is barred by limitation act. You can refuse to pay the arrears of maintenance as well as the interest amount. If he is not cooperating to register the property, you may issue a legal notice demanding him to execute the registered document in your favor or else you can drag him to court with a suit for specific reliefs. 

2. You may have to look for one yourself.

3. If you do not have any proof for that except for the audio recording, you may approach police with a complaint against him for the offences of cheating and for recovery of your amount.

4. You may have to talk about it to the builder.

5. Without seeing the papers by which he has quoted these things, no opinion can be rendered to you on this lest it will be a misguidance

T Kalaiselvan
Advocate, Vellore
75676 Answers
1313 Consultations

5.0 on 5.0

1. i believe there is an agreement executed between you and the builder. you need to check that agreement for the relevant clause regarding charging of interest by the builder for any amount to be paid by the allottee which falls due

2. plz check the agreement 

3. as payment was made in cash the builder will mostly deny receipt but you can still prove that cash payment in a suit to be filed by you against the builder 

4. 50,000 towards what?

5. cannot comment basis one sentence extracted from the demand letter addressed by the builder. plz have all your documents checked by a competent lawyer. the parties would be bound by the contract and as such no one party can impose any unilateral terms or conditions on the other party 

Yusuf Rampurawala
Advocate, Mumbai
6638 Answers
63 Consultations

5.0 on 5.0

File a consumer complaint for recovery

Prashant Nayak
Advocate, Mumbai
25386 Answers
65 Consultations

4.4 on 5.0

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