This article explores the issue of delayed possession under RERA and the compensation provisions available to buyers when developers fail to deliver homes within the promised timelines.

What is Delayed Possession?

Delayed possession refers to a situation where the builder or developer fails to hand over possession of the property to the buyer within the agreed-upon timeline. The delay can arise for a variety of reasons, including:

1. Lack of funding or financial issues with the developer.
2. Approval delays from local authorities or government bodies.
3. Construction delays due to labor shortages or material procurement problems.
4. Legal disputes or regulatory issues.

Such delays can cause significant inconvenience to homebuyers, especially if they have already made substantial financial commitments and planned their lives around the possession date.

RERA’s Role in Preventing Delayed Possession

RERA has implemented several measures to curb delayed possession and ensure that developers are held accountable. Under RERA, developers are legally bound to adhere to the project timelines mentioned in the sales agreement. If the developer fails to hand over possession as per the contract, RERA ensures that homebuyers are compensated.

Key Provisions Under RERA Related to Delayed Possession

1. Promised Completion and Possession Date: Under RERA, developers are required to specify a completion date for the project at the time of registration with the regulatory authority. The timeline for possession must be clearly outlined in the sale agreement between the builder and the homebuyer. Any delay beyond this date triggers the provisions for compensation.

2. Completion and Occupancy Certificates: The builder is mandated to complete construction as per the approved plans and obtain the necessary completion certificate and occupancy certificate from local authorities before possession can be handed over to the buyer. A failure to do so can lead to penalties and legal consequences under RERA.

3. Developer Accountability: If a developer delays possession beyond the stipulated date, they are legally obligated to compensate the buyer. This ensures that developers cannot arbitrarily delay the possession of a property without consequences.

Compensation for Delayed Possession

The compensation mechanism under RERA aims to provide relief to aggrieved buyers in case of delayed possession. The compensation is typically calculated as follows:

1. Compensation for Delay in Possession:

• Refund of the Paid Amount: If the possession is delayed beyond the committed date, the homebuyer has the right to ask for a refund of the amounts already paid, along with an interest penalty.
• Interest on Paid Amount: In case the buyer opts not to seek a refund and instead waits for possession, the developer is liable to pay an interest penalty on the amounts already paid by the buyer. This interest is generally calculated at the rate prescribed by RERA, which could be around 2% above the lending rate of the Reserve Bank of India (RBI).

2. Right to Cancel the Agreement:

• In cases where possession is delayed for an extended period (often 6 months or more), the homebuyer has the right to terminate the agreement with the developer and claim a full refund of the paid amount along with compensation. The builder is then obligated to refund the amount within 45 days, failing which they would be liable for additional penalties.
• The homebuyer may also claim interest on the refunded amount if it is not refunded within the prescribed period.

3. Builder’s Duty to Inform About Delay:

• Developers are required to notify homebuyers in writing if the project is going to be delayed. This transparency allows buyers to be aware of the situation and explore compensation options.
• Force Majeure Clause: Developers may invoke a force majeure clause in certain situations, like natural disasters, strikes, or other unforeseen events. However, even in such cases, the developer is required to inform the buyer promptly and seek an extension.

4. Penalties for Non-Compliance:

• If developers fail to adhere to RERA regulations, they can be penalized by the regulatory authority. Penalties can include fines, compensation to buyers, and even imprisonment in extreme cases. These penalties serve as a deterrent for developers who deliberately delay projects.

5. Dispute Resolution:

• If there is any disagreement regarding delayed possession or compensation, homebuyers have the right to approach the RERA authority for redressal. The authority is empowered to adjudicate disputes between builders and buyers, ensuring timely resolution and protecting the interests of consumers.

Steps to Take in Case of Delayed Possession

If a homebuyer faces delayed possession, the following steps can be taken:

1. Review the Sale Agreement: Check the original sale agreement to confirm the agreed-upon possession date and terms of delivery.

2. Contact the Developer: Initially, it’s advisable to approach the developer and seek a formal explanation for the delay. Builders are often required to send formal notices to buyers regarding delays.

3. File a Complaint with RERA: If the delay extends beyond the stipulated period and the developer fails to resolve the issue, a formal complaint can be filed with the local RERA authority. The complaint must detail the facts of the case and any communication between the buyer and the builder.

4. Seek Legal Help: In cases where the RERA process does not provide a satisfactory resolution, or the builder is non-compliant, homebuyers can approach a consumer court or take legal action as per the provisions under RERA and the Consumer Protection Act.

Conclusion

Delayed possession is one of the most common grievances among homebuyers in India, and RERA has been instrumental in bringing some much-needed accountability to the real estate sector. While developers must adhere to the agreed-upon possession dates, the law ensures that buyers are not left at a disadvantage in case of delays. Through provisions for compensation, refund, and dispute resolution, RERA has created a more transparent and buyer-friendly ecosystem in the Indian real estate market.