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Now, real estate developers file cases against homebuyers in UPRERA

While some realtors have moved against homebuyers for non-payment of dues, others have filed complaints against authorities for not issuing completion certificates on time.

UP RERA also asked erring developers to give details of properties that can be auctioned

UP RERA also asked erring developers to give details of properties that can be auctioned

Real estate developers are now taking recourse to RERA and lodging complaints against homebuyers for non-payment of dues. As many as 50 such cases have so far been filed with UPRERA, sources told Moneycontrol.

Some builders have also filed complaints with UPRERA against development authorities for not issuing completion certificate on time, they said.

As many as 43 cases have been filed by Supertech Group and three cases by Logix Group against homebuyers who have not deposited money as per the builder-buyer agreement. In some cases, builders have been unable to conform to the construction schedule as their cash flows have been affected  due to non-payment of dues by buyers, they claim.

In many cases, the builder has received the occupation certificate from the authorities and construction has been completed. The unit is ready for possession but payments have not been received from homebuyers, they said.

"Builders have filed complaints against homebuyers with UPRERA to direct allottees to pay the outstanding dues along with penalty and take possession of the units," Balwinder Kumar, member, UPRERA, told Moneycontrol.


Hearings on these matters have already taken place, he said.

In some cases, since the value of the residential unit has not appreciated, buyers are either seeking refund with interest or are ready to take possession of the unit even in 2020 as long as the developer is willing to pay them delay penalty, he says.

Under the RERA Act, Chapter 4 clearly outlines the rights and duties of allottees under which the allottee who has entered into an agreement for sale to take an apartment, plot or building is responsible to make necessary payments in the manner and within the time as specified in the document. The allottee is also liable to pay interest, at such rate as may be prescribed, for any delay in payment towards any amount or charges.

Section 31 of RERA also clearly states that any aggrieved person may file a complaint with the Authority or the adjudicating officer for any violation or contravention of the provisions of this Act or the rules and regulations against any promoter, allottee or a real estate agent.

“Delay in flow of funds hampers construction of projects on time,” says Mohit Arora, MD, Supertech Group.

There are more developers planning to approach UPRERA with similar grievances. “How do we move ahead with construction if 60 percent buyers are defaulters out which 48 percent banks have stopped disbursals,” asks a consultant associated with a real estate firm in NCR.

“We’ve been approached by many buyers who want a refund at the rate of 12 percent as the value of their property has not appreciated,” claims Ashwani Prakash, a consultant.

Another NCR-based developer Gaursons has filed a complaint in UPRERA against Noida Authority for not issuing completion certificates on time.

“We have moved UPRERA as authorities have not been issuing completion certificates on time despite construction being completed at our end. Temporary completion certificates do not serve any purpose as properties cannot be registered. Due to the delay in issuing completion certificates, developers have to pay delay penalty to buyers,” says Manoj Gaur, MD at Gaursons.

Authorities too should get themselves registered under UPRERA as they too fall under the definition of promoter. “If authorities are registered under RERA, 80 percent of our problems would be solved,” he says, adding they should be held responsible for not issuing certificates on time.

As per the RERA Act, a promoter is defined as a person who constructs or converts a building into apartments or develops a plot for sale.

Homebuyers say that while real estate developers have the right to approach UPRERA, the regulator should look into the matter holistically – see to it whether the developer too has adhered to the terms of the builder-buyer agreement.

"Why should homebuyers continue to pay if construction has been stalled. Most buyers have paid over 40 percent for projects, some even 90 percent - why should they continue to put more money at risk if there is no progress on the project," asks Abhay Upadhayay, convenor, Fight for RERA.
Vandana Ramnani
first published: Jun 4, 2019 12:56 pm

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