The delay in delivery of flats and homes by the builders has plagued Indian real estate market. As per a study by ASSOCHAM India out of more than 2000 projects, which were under implementation by the end of the year 2016, approximately 39% were delayed. 90% of the delayed projects are residential projects.
On an average, the delays caused ranges around 39 months, whether it is a private project or a public one. This is a delay of more than a year, which is costly for the customers and builders alike. There had been much anticipation among both builders and buyers about the new real estate bill, Real Estate (Regulation and Development) Bill, 2016 (i.e. RERA)
The buyers of units under residential projects have been the greatest sufferers of all, paying the EMIs for home loans, rent for accommodation and waiting for their dream home to be completed. RERA does have very clear provisions for new projects.
However, does it in anyway protect existing homebuyers? What remedies are there for you if you have paid almost 90% of the price to the builder and your home is nowhere near completion?
Reasons of Delay
While as a buyer you would want to penalize the builder and demand compensation or delivery of the project as soon as possible, one question that is usually ignored by most buyers is, “why the delay?” The question is an important one since you can set your expectations accordingly
1. Delay in Approvals by Various Govt. Depts.
Bureaucracy has long been the bottleneck for the development projects. Though not the only reason, it is significant enough reason to cause delays. Delay in clearances has even lead to the cancellation of projects after the builder has invested huge sums of money in procurement and development of the land. Such delays are the greatest discouragement of investment in the real estate sector. Combined,these lead to dismal confidence in consumers. Thus, despite demand and need, final consumer is skeptical of putting money in new projects.
2. Financial Crunch
Any delays in execution of the project, directly affect the cost structure. As per the NSSO Annual Report 2015-16,the cost of raw materials itself rose by anywhere between 34% to 200% including the labor cost over past five years. Such cost escalations make construction activity expensive, forcing builders to slow down, due to liquidity crunch.
3. Multiple Projects
Most of the large builders have been running multiple projects simultaneously. The method has been of collecting money from one project and using it to start another. Perhaps in the hope that market will keep going up and they will reap better profits on new projects. Once again cost escalations were not factored in. Thus, this risk went unmanaged, leading to complete cessation of work, and delay in completion of the project.
4. Huge Unsold Inventory in Under Construction Project
Builders usually avoid completing unsold apartments. Thus, if your tower (in a multi tower housing) has unsold slots of inventory, it is likely that the builder will wait till at least 90% of the inventory has been sold out. Ultimately, causingdelay of several months. The situation is aided by the callousness of the market trend.
How will RERA Help?
RERA protects existing buyers by indirectly implying quick completion of the project. All the builders must register their under-construction projects with RERA on its website within the state. While it asks for all the relevant information about the projects, it aims to publish much of this information on the website for the consumers. Thus, the builder must register all projects, for which completion certificate has not been issued, with RERA.
What Can an Existing Buyer do Under RERA for Delayed Possession of House?
Buyers of incomplete projects can:
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Know the stage-wise completion schedule of the project like provision of water, electricity, sanitation, etc.
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Withdraw from the project with a refund of their invested money, interest on it and compensation for other expenses
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Demand compensation from the builder if title deed is found to be faulty
In the case of non-compliance of the builder or dispute, the consumer can approach the Real State Authority of the respective state. For more clarity on your condition and remedies, you can connect with real estate lawyers.
Most of the time you can also file your complaint without a lawyer in case of RERA or consumer disputes forum. However, it is recommended that you consult a lawyer before going forward with legal action. It will help you in understanding the course you should take.
How to Find Real Estate Lawyers?
Don’t worry, in the times of internet, there’s no need to ruffle your contact list for references. Now you can search, consult and even hire a lawyer of your choice online. Online legal service aggregators like Law Rato enable you not just to find real estate lawyers nearby you can also consult multiple lawyers before finalizing one.
Source From : www.sify.com/finance/how-does-rera-help-existing-homebuyers-news-finance-rivqdihhefdfc.html
