The RERA Act has been a boon to home buyers since it has tried to protect their rights. It strives for fixing accountability and responsibility on the real estate developers, works towards transparency and, in the process, facilitates the growth of a mature real estate investment climate.
Recent case
A recent case in Karnataka highlighted how RERA has helped to establish the sanctity of an agreement between a developer and a buyer, who cited force majeure clause to avoid payment of interest to an aggrieved homebuyer. It has wider ramifications for those who are going to lock investments in a dwelling unit or have already done so.
The words of an agreement drawn up between a homebuyer and a developer are important and have to be followed in letter and spirit. The developer has to discharge the contractual obligation and cannot go back on them.
Each word in agreement significant
If a developer fails to deliver a house/flat according to the time schedule mentioned in the agreement, the developer has to pay interest on the relevant amount agreed upon in the agreement. Even if the dwelling unit is handed over, it doesn’t offer any freedom to the developer to avoid paying any interest that might be due to the buyer for delay in handing over the unit.
In this context, it is important to refer to Section 18(1) of the RERA Act. It states that the buyer has the right to get refund of whole of the amount invested a project including interest and including compensation if the developer is not able to deliver the dwelling unit according to the terms of the sale agreement between the two. It also applies if the developer fails to take the project to completion abiding by the timelines mentioned in the agreement. Even if the developer firm discontinues the business or project, the obligations remain.
Section 18 (1) also states that if the homebuyer does not withdraw from the projects and waits till the delayed delivery, he/she is entitled to compensation every month for the delayed period. It flows from Section 18(2) and 18(3) of the Act.
The Real Estate Regulatory Authority legislation, or RERA, was enacted to shield the hapless homebuyer from unscrupulous real estate developers. It came into effect in May 2016. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
