What to do If Your Builder Has Run Out of Money

Thousands of buyers are in a state of confusion and financial lurch since their builders have run out of money to fund the project. Who can the buyer blame for the bankruptcy of the builders? The government’s regulations have made t difficult for the builders to survive. Only key players, who have standing and enough funds to finish the projects without any hitch are in the game. Rest has been shown the exit door and so have been their projects.

Most people stay away from asking a piece of professional advice in this case and refuse to take the help of their family members and friends.

We discuss what a buyer should do in such a situation:

Check the investment

If your builder is asking you more money than they should for the project or agreed upon, then you can approach the consumer court and file a complaint against them. If your builder threatens to leave the project, then it is a red flag and must be brought to the attention of the authorities.

Read the agreement

The builder buyer agreement is generally written in favour of the builder. If you feel a particular clause needs to be reworked or is unfairly in support of the developers, then you can ask the builder to rewrite it. Also, make sure that you go through the timeline that is promised to you and make sure that the timeline is practical to follow.

Keep the talk going

The builder will not try to give you a straight forward answer over any of your concern, but that does not mean you should let your concerns loom forever. Keep the conversation going and try to get a straight answer from them as much as possible.

Find the amount of debt

After finding out that your builder is in debt try finding how deep he is into it. If your builder has gone bankrupt, it will be easily seen. Make sure you immediately file a claim of property in the consumer forum. In case of insolvency, your property and claim get recorded.

Provisions for the buyers in such case

The MAHA RERA is on its way to lay down the Standard Operating Procedure which will give the buyers of the residential property power to throw the builder if he is not working on the project as promised.
In case the developer goes insolvent then the buyers are now financial creditors. That means it will be easier for the buyers of such claims to recover their money.
The Supreme Court has ruled that the developer’s clauses are non- binding if it leaves no other choice but only to sign for the buyer. According to the Consumer Protection Act, 1986, Section 2 makes a one-sided clause in an agreement unfair and biased.

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