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The builder-buyer agreement, which is signed by both parties during the finalizing of the real estate deal, mentions a specific date on which the builder promises to hand over the possession of the property to the buyer.
However, not everything goes as planned. Fraud builders do not keep their promise and when asked by the buyer about the delay, they cite financial reasons, lack of funds, and other reasons. Some builders even alter the design of the property without the buyer’s knowledge.
In case of a genuine reason for delay, the builder can ask for a time extension. However, if the builder fails to deliver the possession on the extended date, then the buyer can take legal action against the builder for delay in possession of property.
But, it must be noted that the buyer is liable to take legal action only when the delay is due to the builder’s fault; if the delay happened due to some natural calamity, such as fire, earthquake, or any other reason beyond human control, then the buyer cannot take action against the builder for delay.
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Reporting a fraud against a builder is a big step and an important one. Apart from delay in property possession, many builders also scam the buyers by delivering sub-standard property that has leaking ceiling, flawed plumbing and electricity system, incomplete hearthplace protection system, and more. In this case, you can file a lawsuit against the builder with the help of a lawyer. Hiring a lawyer is important because he/she knows the laws and Acts (such as RERA) that entitles the buyer to take strict action against the fraud builder.
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Frequently Asked Questions (FAQs)
RERA, Domestic Building Contracts Act, 1955, and Indian Contract Act, 1872, are the major laws, apart from others, that protect the rights of real estate buyers.
RERA stands for Real Estate (Regulation and Development) Act, 2016. The Parliament of India had passed this Act to protect the rights of real estate buyers and to regulate the real estate industry.
Yes. You can file a regular suit at the court of competent jurisdiction under the Indian Contract Act, 1872. The law may initiate civil and criminal proceeding against the builder, depending on the severity of fraud.
Yes. You can file a complaint under the Consumer Protection Act 1986 stating “deficiency in service” against the builder in case of delayed property possession.
Under RERA, a buyer is entitled to ask for interest on the payment he/she made to the builder till the last date. As a buyer, you can also claim compensation for damages you suffered due to property possession delay. If a builder is unable to justify the delay, he/she, under the RERA in some states, has to refund the money that the buyer invested, along with the interest.
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