Project delay? Here you can appeal

Everyone dreams about buying his/her own home but this dream can turn into a nightmare when the project is not delivered on time or not as per the promised quality. Earlier, the recourse action was limited to appeal in civil courts for such cases but in the past couple of years various changes have been made in the overall system to expedite the process. Some of these changes are in the form of reforms introduced by the government to bring transparency and reduce litigation. For instance, Real Estate Regulation Authority (RERA) is a significant step taken by the government. It has a dedicated Appellate Tribunal to handle various disputes related to real estate projects.

Currently, all the states are in the process of implementation of RERA and releasing the state regulations for the same. Until RERA is implemented in all the states, one can approach National Consumer Dispute Redressal Commission (NCDRC). Earlier, the Consumer Protection Act allowed homebuyers to approach the National Consumer Disputes Redressal Commission (NCDRC) only if the project cost exceeds INR10 million. This limits the jurisdiction to small home buyers whose project cost is less than INR 10 million or 1 crore. In a historic decision by the Supreme Court, homebuyers can now file a complaint together by forming an association to fulfil the condition of the minimum project cost of INR10 million. In Mumbai, where a significant number of the apartments that are above INR10 million, anyone can approach NCDRC even without forming an association.  In addition, according to the prior mandate an association can only file a consumer complaint if it is recognised under the Bureau of Indian Standards (Recognition of Consumers’ Associations) Rules, 1991. The above said stipulation is also cast aside by the NCDRC and the Supreme Court.

Another option for home buyers is to approach Competition Commission of India (CCI) who prohibits anti-competitive agreements and abuse of dominant position by enterprises. If a builder imposes unfair clauses on the buyer, one can approach the Competition Commission of India (CCI).

The fact cannot be ignored that NCDRC has given remarkable judgments before in favor of home buyers but the main advantage of RERA is that regardless of the apartment cost, any home buyer can file a complaint. On the other hand, accused developers can seek for justice in the Supreme Court as any judgment given by RERA Appellate Tribunal and NCDRC can be challenged at the apex court. Recently, the government has also reduced litigation charges in certain states. This move is especially beneficial for affordable housing projects where sometimes court proceeding charges are more than the cost of an apartment.

In conclusion, on the brighter side, buyers have options to seek justice with these authorities and if the dispute continues then, Supreme Court can always be approached to give an unbiased judgment. Even though there is no clarity on which authority the buyers should approach, we expect that RERA will conquer the challenges in this sector and its implementation will help buyers to achieve seamless transactions and avoid financial loss in property investment.

Colliers International | Mumbai, Indiabulls Finance Centre, 17th Floor, Unit No. 1701, Tower 3, Senapati Bapat Marg, Elphinstone (W), Mumbai 400 013, Maharashtra, India | Tel: +91 022 4924 9780