• Flat cancellation due to delay in construction

I had booked the flat in one of the famous project in Bangalore on 07 March 2014 and agreement was made with delivery time as December 2014. I am visiting the site regularly but I didn’t see any progress in construction till last two months. Now I don't have a hope, when they will finish the construction and not satisfied with builder response. I paid 3 lakhs as a booking amount. Recently they issued a demand note for further payments as well. Now I want to cancel my flat, but in the agreement they had mentioned 15% will be the cancellation charge. Why I have to lose my hard earned money due to "builder side delay" as a cancellation fee? Do I have a right to get the refund of paid amount with interest? Because of delay in construction. If I have a right to ask refund, what is the interest rate that I can demand. Please share your valuable suggestions and guide me how I have to proceed on this.
Asked 2 years ago in Property Law from Bangalore, Karnataka
Religion: Hindu
issue a legal notice demanding the builder to complete and hand over the possession of the flat, together with delay compensation as was agreed by him in the agreement to build, if he does not oblige or comply with the demand made, then you can file a consumer complaint before the district consumer court seeking for delay compensation, if you seek cancellation of the flat then you will have to file the complaint before the Karnataka State Consumer Disputes Redressal commission, at Bangalore seeking cancellation and refund together with interest @ 18% p.a plus compensation and damages till refund is made by the builder.
If you approach builder and seek cancellation 15% of the total cost of the flat can be demanded from you by the builder. 
It is better to take the first remedy than choose the 2nd remedy.
Kiran N. Murthy
Advocate, Bangalore
1012 Answers
91 Consultations

5.0 on 5.0

1) it is necessary to peruse agreement signed by you with builder to advice 

2) if agreement mentions builder will deliver possession by December 2014 and he fails to do so you can claim interest for delay in delivery of possession at rate mentioned in agreement 

3) if agreement is silent regarding rate of interest then you can claim same interest charged by builder for delay in making payment 

4) you can cancel agreement on account of his failure to hand over possession and seek refund of your money 

5) builder cannot claim cancellation charges as you were forced to cancel as no construction had bee carried on by the builder 

6) you can move consumer forum against the builder if he deducts cancellation charges on cancellation of agreement 
Ajay Sethi
Advocate, Mumbai
46702 Answers
2763 Consultations

5.0 on 5.0

1) Since the builder has not fulfilled his part of the contract/Agreement he cannot hold you legally liable for the demand of refund.

2) send the builder a legal notice along with a letter of cancellation of the Agreement demanding immediate refund of the amount advanced. While there is no standard rate of interest prescribed in law, you can demand an interest if 18% .

3) If the builder comes ahead with a compromise settle the matter as a suit in the court for recovery will take long and will involve legal costs
S J Mathew
Advocate, Mumbai
2263 Answers
110 Consultations

5.0 on 5.0

Hi, you have to file a complaint under Consumer Protection Act for deficiency of services, before filling a complaint you have to issue a legal notice.

2. As the builder has fail to deliver the possession of apartment as per the terms of the agreement so you have every right to ask for refund of the amount and also for damages.
Pradeep Bharathipura
Advocate, Bangalore
4561 Answers
204 Consultations

4.5 on 5.0

1. Once an agreement is entered into it binds both the parties.

2. You should wait for the expiry of the period of delivery of possession. If possession is not delivered within the time period including grace period mentioned in the agreement then issue a lawyer's notice for cancellation of agreement to seek the refund of money.

3. You are not liable to pay cancellation charges if the agreement is cancelled due to the failure of the builder to deliver the possession within the promised time.

4. If builder does not refund the advance amount then file a lawsuit against him to recover the advance and also compensation.
Ashish Davessar
Advocate, Jaipur
23120 Answers
639 Consultations

5.0 on 5.0

The recitals of the sale agreement is to be referred for knowing the exact clauses that define the cancellation, penalty for cancellation, delay in construction/completion, amount  and rate of penal interest to be paid by the builder for such delays etc. 
You may peruse the sale agreement once again fully and note the clauses in this regard.
However, you have an option to approach this issue legally by first issuing notice to the builder informing him that due to his inordinate delay in completing the construction and as you dont find the  completion in any near future owing to the prevalent circumstances, you would like to cancel the booking due to the fault of the builder who breached the condition to complete the construction violating the clause contained in  terms of the registered sale agreement  and after that if you do not get a proper response or getting an adverse reply, you can approach the consumer forum to redress your grievances against the builder. 
T Kalaiselvan
Advocate, Vellore
36859 Answers
403 Consultations

5.0 on 5.0

Hi sir/madam, you don't worry, there is no question of loosing your hard money but it will depend upon the terms and conditions of the Sale Agreement or Memorandum of Understanding. In the said documents having delay from the builder, he has to pay interest on the booking amount and refund the entire booking amount. If yes, you have every right to get your booking amount in full alongwith interest. You have to issued a legal notice to the said builder for the same, if it is not complied the demand legal notice thereafter you have to file petition u/s 12 of the Consumer Protection Act, 1986 for claiming the booking amount with interest as well as compensation for mental agony for the deficiency of service of him to you. If you want my legal service I will do it.
C. V. Jadhav
Advocate, Bangalore
475 Answers
15 Consultations

4.7 on 5.0

1. You have not mentioned as to what was he payment terms. Was the 2nd payment to be made after completion of certain work? Has it been mentioned in the booking agreement or brochure that after receiving the 1st payment they will complete certain work after which they will ask for further payment? 

2. If the answer to the above is affirmative then you can send a legal notice pointing out that builder has not complied with the terms of the agreement and the second payment will be released only after he complies with the construction term of the agreement,

3. If he refuses to comply with the said terms of the agreement, file a complaint case before the local District Consumer Dispute Redressal Forum alleging efficiency in service and unfair business practice claiming refund of your booking amount paid with bank rate of interest, damage and cost.
Krishna Kishore Ganguly
Advocate, Kolkata
18749 Answers
452 Consultations

5.0 on 5.0

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