On Time Possession of Apartments
Getting ready, on time possession of an apartment is the dream for any home buyer. However, that depends entirely on the kind of project and more importantly the developer one has chosen to go with when it comes to making one of the most important investment decisions of their lives. It is indeed a momentous occasion when a developer gives possession of apartments within the stipulated time frame.
Statistics can sometimes help to underline an issue better than anything else. Consider the fact that in 2017, across Maharashtra, there were over 5.5 lakh units on which possession had been delayed by developers. In about 10% of these the delay was over 5 years while in almost 50% the possession had been delayed by six months to a year. Considering the fact that most home buyers take on home loans and have to pay EMIs as well as rent while waiting for possession of their new homes, the delays get translated into major losses for the buyers. This is why it is always prudent to go with a reputed developer who has honored their commitments to buyers in the past, whether it is the handover of possession at the stipulated time or the amenities that have been outlined as a major advantage of the project.
Of course, today, with RERA being enacted and very well implemented in the state of Maharashtra, the home buyers can rest a bit easy. They always have recourse of approaching the RERA board in case a developer delays possession of their home. For any project registered under RERA, the developer/promoter has to submit in writing the specific dates for phase wise completion of a project, the actual date of possession, details that outline that the land is free of encumbrances and has a clear title. The developer also has to maintain a separate account where 70% of the amount realized from buyers is to be deposited and used for construction and land cost of that project alone.
Such stipulations under RERA are what trusted and reputed developers have adopted as a matter of their business practices since their inception. Again if one goes by the record, it come as no surprise that it was the reputed developers across the state who were part of the first lot of developers who registered their projects under RERA.
For any home buyer it is extremely important to not just get taken in by the attributes of the project; it may seem like your dream home, but not getting it on time could turn into a nightmare. Yes, RERA has played a major role in streamlining the real estate sector and making developers accountable, but the fact remains that there is no substitute for a proven track record and superior reputation built on trust.
What if a builder defaults on a RERA registered project?
- In case the builder defaults and delays the possession of the property as per the ‘agreement of sale’, the buyer has the right to claim the refund of the amount paid along with interest.
- In case the buyer does not want to withdraw from the project and do not want a refund, the promoter has to pay interest for every month of delay, till the handing over of the possession.
- In case of delay in possession the grant of compensation is through an adjudication process involving the regulatory authority and an adjudicating officer who will be appointed by the state government, on a case to case basis.
While every state fixes the interest rate, the average interest payable on delay is the State Bank of India highest Marginal Cost of Lending Rate plus two percent.