Project Delayed for a Year? Is Asking for a Refund a Good Option?
Jun 18, 2019 Legal Guidance
Courts in India have said it again and again that the buyers could not be made to wait infinitely to be given the possession of their property. The builders are obligated to refund the buyer if the project has been delayed.
In March, the Supreme Court of India has given the orders to the builders that if the project has been delayed, then the builders are supposed to pay the compensation the buyer. The home buyers cannot be made to wait for an unreasonable amount of time.
Recently, the National Consumers Disputes Redressal Commission (NCDRC) stated that the developers could not use the force- majeure clause to defend the delay in the completion of the project and make the buyers wait indefinitely. Force- majeure is the clause that states that the project has been delayed due to forces beyond their control, also known as ‘act of God’, from fulfilling their obligations.
When should a buyer ask for a refund?
This is one of the most critical questions that arise often; at what point should a buyer seek a refund from the builder for the project? Asking for a return is a good idea, but it depends on several factors:
1. If the builder is not going to contest:
The best case scenario is that you approach the builder and tell him that you want a refund since he failed to complete the project on time. The builder agrees and gives you the money back.
However, this rarely happens the builders often urge the buyer to keep patience and not seek a refund.
2. If the builder is contesting:
This is what happens in most cases. In this scenario, a buyer can do either of two things: drag the builder to the state RERA and file a complaint against them and seek a refund. Even though RERA forums have stated this over and over again that the builders cannot delay the project and must pay the compensation under such a scenario. The builder can prove his innocence by explaining the reasons why he couldn’t complete the project on time. If the builder can prove that the delay of approvals from the government agencies were the reason for the delay or the locals challenged his move to acquire the land on which the project has to be built, the court can rule the favour in the builder’s favour.
If the buyer has approached the state level consumer forum, the builder has the right to challenge the verdict on the national level consumer forum.
3. If the builder in deep waters:
In case a large amount of money has already been invested in the project, it makes sense to seek a refund if the project has yet to be started. If the project has been delayed, the court can order some other builder to take over the project. If the new developer is already too far into the construction, then it makes sense to wait for the construction to complete. The probability of getting possession is higher in such a case.
In March, the Supreme Court of India has given the orders to the builders that if the project has been delayed, then the builders are supposed to pay the compensation the buyer. The home buyers cannot be made to wait for an unreasonable amount of time.
Recently, the National Consumers Disputes Redressal Commission (NCDRC) stated that the developers could not use the force- majeure clause to defend the delay in the completion of the project and make the buyers wait indefinitely. Force- majeure is the clause that states that the project has been delayed due to forces beyond their control, also known as ‘act of God’, from fulfilling their obligations.
When should a buyer ask for a refund?
This is one of the most critical questions that arise often; at what point should a buyer seek a refund from the builder for the project? Asking for a return is a good idea, but it depends on several factors:
1. If the builder is not going to contest:
The best case scenario is that you approach the builder and tell him that you want a refund since he failed to complete the project on time. The builder agrees and gives you the money back.
However, this rarely happens the builders often urge the buyer to keep patience and not seek a refund.
2. If the builder is contesting:
This is what happens in most cases. In this scenario, a buyer can do either of two things: drag the builder to the state RERA and file a complaint against them and seek a refund. Even though RERA forums have stated this over and over again that the builders cannot delay the project and must pay the compensation under such a scenario. The builder can prove his innocence by explaining the reasons why he couldn’t complete the project on time. If the builder can prove that the delay of approvals from the government agencies were the reason for the delay or the locals challenged his move to acquire the land on which the project has to be built, the court can rule the favour in the builder’s favour.
If the buyer has approached the state level consumer forum, the builder has the right to challenge the verdict on the national level consumer forum.
3. If the builder in deep waters:
In case a large amount of money has already been invested in the project, it makes sense to seek a refund if the project has yet to be started. If the project has been delayed, the court can order some other builder to take over the project. If the new developer is already too far into the construction, then it makes sense to wait for the construction to complete. The probability of getting possession is higher in such a case.
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