Developers cannot hold up delivery of apartments on grounds that buyers missed payment deadline if promoters fail to update customers about completion of various construction stages.
In a significant order that enhances rights of buyers, the Tamil Nadu Real Estate Regulatory Authority (TNRERA) on Monday ruled that developers cannot demand interest charges from buyers in the event of a housing project getting delayed.
The case pertains to Palm Riviera, a housing project, at Thirumudivakkam on the western outskirts of the city developed by Amar Prakaash Developers Pvt Ltd. P Latha Devi and E Gani registered complaints against the promoter charging that their apartment unit was not handed over in 2015 as per the agreement entered between the developer and buyers in 2013. While the buyers paid Rs 46.09 lakh including UDS, the complainant said that the developer demanded an additional Rs 3.42 lakh to handover keys of the flats.
In reply, Amar Prakaash Developers Pvt Ltd stated that complainants are not entitled to ‘insist and press’ upon the stipulated time for handing over the flat as per the agreement. Noting that payments relating to interest charges was due from the complainants, the promoter said that claim of possession of the apartment by the complainants was not permitted under the agreement. According to the agreement, the developer is entitled for interest at 24% per annum had the buyers not adhere to payment schedule.
However, TNRERA adjudicating officer G Saravanan observed in his order that no documents pertaining to how the interest charges over the delay in payment schedule amounting to Rs 4.40 lakh has been arrived at. “As per the terms of agreement, the developer is entitled for delay interest charges from the date of default till the date of actual payment by the complainants. But, the liability of paying delay interest charges for default payment by the complainants would arise only on due intimation of the date of completion of the stage of construction with due date of payment,” the order said. Henceforth, the plea by the developer seeking interest charges owing to delayed payment is rejected.
In turn, the state’s real estate regulator awarded compensation to the buyers who have been residing in a rented apartment since 2015. The TNRERA has ordered the developer to pay compensation to tune of Rs 5.40lakh at the rate of Rs 9,820 a month for a period between May 2015 and November 2019 for delaying the handing over of the apartment. Moreover, Rs 2 lakh has been fixed as compensation for causing mental agony and inconvenience to the complainants.