IBC and RERA, the way forward for Indian homebuyers
A recent report by Anarock cites that 5.56 lakh homes across India are delayed, with Mumbai and Delhi accounting for the 2/3rd of these struck projects.The situation is worse in metro cities as compared to smaller ones.
In National Capital Region (NCR), unfinished projects of Amrapali Group, Jaypee Group and Supertech Ltd is facing legal heat from the Supreme Court for playing with homebuyers money.The apex court also warned builders across the country against diverting money to other projects and termed it as a “criminal breach of trust”.
In Mumbai, one such delayed project happens to be of a listed company Housing Development & Infrastructure Ltd (HDIL), the Whispering Towers project, which is in Mulund region.The work on this project had begun way back in 2010. But most of the buyers claim that they have paid 60-70 percent of the total project cost.Across the country, many projects faced delay due to various reasons, mainly builder defaulting on loans to banks and delayed possession.
Frustrated by the long wait, some of the homebuyers have filed a first information report (FIR) with the police and are also exploring other options.“We have filed an FIR with the police. Other than, we are approaching lawyers for Real Estate Regulatory Authority (RERA) and National Consumer Disputes Redressal Commission (NCDRC). We don’t know where to approach because every day there is a new surprise”, said an anguished ShyamChittari, an NRI who had invested in this project.Legal experts are of the view that the buyers should immediately move the courts to get clarity and justice in this matter.“Immediately, application should be moved to high court to expedite the ongoing criminal cases. Matters should be pressed upon at various levels including some at consumer court, RERA and some at the metropolitan magistrates court. My advice to flat purchaser is that don’t trust the builder, verify the things yourself and always ensure that you have taken a bank loan so that there is a double layer of check,” said advocate Vinod Sampat.
The homebuyers can also file a complaint with the Maharashtra Real Estate Regulatory Authority demanding compensation and completion of the project at the earliest.If that move is not getting any traction, the homebuyers can take the help of Insolvency and Bankruptcy Code, 2016 ordinance. The new law give homebuyers the status of creditors, and they can file insolvency petitions against developer.
Whispering Towers project was launched in 2010 and delivery was promised in 2014. However, buyers claim that construction of project stopped in 2015, and there is no clear timeline on when they will get delivery of their homes.“I booked the flat on day 1 when the project was launched on October 8, 2010. I was promised that within four years, I will get my home. But that never happened. The project was delayed many times and for the last three years not a single brick is laid in this project,” claims LR Chandan, a buyer in the project.
Buyers also claim there is no communication from the builder about the delivery timeline. “Builder does not know when he is going to complete this project. Every buyer is getting different possession date in the same buildings,” said, DakshehThaker, another home buyer in the project.
Many homebuyers who have invested in this project are staying on rent and due to the delay in the project they are burdened with the payments of both bank EMIs as well as monthly house rent.”I am staying on rental basis. I am paying about Rs 31,500 per month as rent. We don’t know what is going to happen as there is no communication from the builder,” says a bitter Vasant Ghotage, a homebuyer in Whispering Towers project.
The financial viability of this project is also a big worry for the homebuyers with Allahabad Bank sending the promoters an auction notice for the project on July 7.This notice was later withdrawn. But it is unclear whether the company has been able to renegotiate its loan terms and secured enough money to restart the construction.
“We booked in 2010 and subsequently, we came to know through advertisements that HDIL has mortgaged this property to different banks. They have not informed us about this. Neither does our agreement mention anything about this,” claims Regina Vincent, an early homebuyer of this project.