In a major relief for homebuyers, the Bombay High Court has ruled that flat buyers are entitled to receive interest for every month of delay in possession under the Real Estate (Regulation and Development) Act (RERA). The court said that developers cannot delay projects for years and avoid paying compensation to buyers who have already invested their money.
The purpose of introducing RERA is to provide safety for homebuyers against any delays in housing projects. Furthermore, he added that buyers have a legal right to get the interest in case of delayed projects. Buyers investing in such delayed projects have the right to get interest until they get possession of their homes.
The case included ten people who had purchased flats from a residential project in Mulund, Mumbai. Due to the delay in the project completion, these people had asked for compensation. In the year 2018, an appeal board under RERA had directed the builder to give interest to homebuyers starting from February 2014 to handover of possession of the flats.
The law makes provisions to protect homebuyers in such cases. According to Section 18 of RERA, there are two options for buyers. They can either stick to the project and get interest payment on delays or leave the project. They can ask for a refund after leaving the project.
Although the court accepted that these circumstances needed consideration in individual cases, the judge also made it clear that such delays cannot go on forever.
The Bombay High Court made it known that RERA was introduced to make the real estate business more transparent. Also, it was done to eliminate frauds and hold the builders accountable. Further, it was meant to develop a faster dispute resolution mechanism among buyers and builders.
Lawyers for homebuyers welcomed the judgment terming it as a positive step for property buyers.
