Around a decade ago, and lasting till the past couple of years, the housing sector in India was going great guns. Residential values were rising, and rising fast, people were rushing to buy flats and houses, and investors were pumping money into the sector hoping to make back quick returns. Many people did make a lot of money, but for the past few years, the sector has seen a lot of distress – flats and houses booked many years ago still have not been delivered. In the sector currently, buyers face a lot of stress. A large section has taken bank loans for buying flats or apartments, EMI’s are still ongoing, they still have to pay their rental, and so on. For example, somebody could have taken a loan for a flat to be ready by 2012, but these flats are not ready as yet. The buyer is not sure about when the delivery will happen, their faith in the builder has also gone, and they are worried about whether they have lost their money. And the builder was supposed to pay a penalty for late delivery of flats, but they use some technicality or other to not pay the penalty, or just outright refuse to pay. Consumers are now approaching consumer forums or courts for getting their rights, and there has been a spate of decisions in the recent past that are making builders think about their approach again (link to article):
he National Consumer Disputes Redressal Commission has ordered Parsvnath Developers to pay a monthly penalty to buyers for delay in handing over flats in Parsvnath Planet, a residential project in the city’s Gomtinagar locality.
The builder will have to pay Rs 15,000 per month to complainants who had applied for flats up to 175 sq metres, while those who went for bigger flats will get Rs 20,000 every month, the commission ruled.
In the Parsvnath case, the NCDRC observed that according to the agreement executed in 2006, the developer was to give possession of flats to allottees within 42 months, that is, in 2009-10. However, flats have not been handed over till now.
In many cases, builders are also under distress. However, in some cases, these builders have extended themselves, trying to grow too fast or otherwise found themselves in other problems. However, the stress of consumers, who are incredibly much smaller than these large developers and really cannot afford the pain that these developers are putting them through, has to be paramount.