Legal Remedies Against Builders In India-Complaint under RERA Act

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If you are an unhappy consumer aggrieved by an errant builder and want him to take to the Court, you have various legal remedies against the builder now.One of the legal remedie is filling a complaint under RERA Act.

Reasons for filing Complaints against Builders:

Generally, complaints are filed against builders for the following reasons:

  1. Delay in possession
  2. Sub-standard construction
  3. Builder charging hidden charges at a later stage
  4. Defective title of the land or property being sold by the builder

Legal Remedies Available Against A Builder:

With an increasing number of builder-buyer disputes in India, it is important for home
buyers to know their rights and the legal course of action to uphold the same. Here are
some legal measures a home buyer can pursue in case a dispute arises:

1. Complaint under RERA (REAL ESTATE (REGULATION AND
DEVELOPMENT) ACT, 2016):RERA Act

Real Estate (Regulation and Development) Act, 2016 has ushered ineffective consumer protection, uniformity, and standardization of business practices and transactions in the real estate sector. Execution of RERA has been a boon for homebuyers. Now homebuyers are also confident of faster and fair resolutions under the law.

RERA Act provides for the establishment of the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure the sale of plot, apartment or building, in an efficient and transparent manner and to protect the interest of consumers.

Now a buyer can file a Complaint against a Builder for delay in delivery of possession, changes in project’s design, sub-standard construction, defects in title, selling the project without necessary approvals etc.

Also Read: RERA Act 2016

2. Complaint under the Consumer Protection Act :

After filling complaint under RERA Act you have also an option to file complaint under the Consumer Protection Act, 1986, a homebuyer can register a complaint against a builder for deficiency in services. The term deficiency in services refers to any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance, which is required to be maintained as per the law.

Remedies under the Consumer Protection Act are in addition to and not in derogation of the provisions of any other law for the time being in force meaning thereby that a homebuyer can choose either proceeding against the builder under RERA or under the Consumer Protection Act. It provides for protection of the interest of the consumer and for that purpose to provide for better redressal, mechanism through which cheaper, easier, expeditious and effective redressal is made available to consumers. To serve the purpose of the Act, various quasi-judicial forums are set up at the district, State and national level with wide range of powers vested in them.

3. Arbitration & Conciliation:

Complaint under RERA Act & Consumer Protection Act are not the only remedies available to a homebuyer. Every builder-buyer contract consists of an arbitration clause to adjudicate disputes between builder & homebuyer. Thus a homebuyer can also seek reference to an arbitrator under the Arbitration & Conciliation Act. Arbitration is a private, contractual form of dispute resolution. It provides for the determination of disputes by a third party arbitrator or arbitration panel, selected by the parties to the dispute. Disputes are resolved on the basis of material facts, documents and relevant principles of law. However Arbitration is an expensive route and hence builders prefer this route. But Supreme Court of India has held that builders cannot force buyers to settle their disputes through arbitration.

4. Remedies under the Insolvency & Bankruptcy Code:

After the advent of Insolvency & Bankruptcy Code several builders were dragged to NCLT. As per the provisions of this Code any amount raised by a builder from a buyer under a
real estate project shall have the effect of commercial borrowing and home buyers are designated as financial creditors. Being financial creditors, home buyers shall have the valuable right of participating in the Committee of Creditors and shall also the voting rights through an authorized representative. Now as per a recent amendment to the Code at least 100 or 10% of the total buyers, whichever is lower, in a project will have to come together to initiate the corporate insolvency resolution process against a developer in the National Company Law Tribunal (NCLT).

For all practical purposes, this amendment can block this forum (NCLT) permanently. Homebuyers do form associations, but only a few people take the lead. Bringing at least 100 or 10% of homebuyers together is very difficult.

Apart from coordination, the costs involved in gathering data for so many people can discourage homebuyers from taking this route. The amendment will make it necessary to spend extra money on collection of data and extra time in mobilizing other buyers to file a case.

5. Police Complaint against the builder:

Homebuyers also have the option of filing a criminal complaint against the builder in addition to the civil remedies as provided in law. In the last few years, several prominent real estate developers went behind bars. An FIR for cheating can be registered against a Builder if he indulges in dishonest dealings. Showing misleading brochures, falsification of
plans or fraudulently reducing the area of the flat – all these are acts of cheating
punishable under Section 420 of the Indian Penal Code, 1860. This is punishable with imprisonment of up to seven (7) years in jail.

At Easy Kanoon we can help when you if your builder is not giving possession of your
property or if you have any other grievance against the builder. We can help you choose
the most suitable option for you to address your grievances against a builder. For
further details write to us at easykanoon@gmail.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.