Can Homebuyers Claim Interest Without a Possession Date?

Recently, the Maharashtra Real Estate Regulatory Authority (MahaRERA) made an important decision that has raised concerns among homebuyers. They decided not to take action on complaints from two people, Gaurav Barve and Avani Barve, who said their new flat in Boisar, near Mumbai, wasn’t ready on time. 

The main issue was that their agreement for sale didn’t clearly state the delayed possession date. This lack of a specific date made it difficult to determine what the developer was responsible for.

What did Homebuyers want?

In this case, the homebuyers expected to get their flat by a specific time. However, since their agreement didn’t mention when exactly they should get the flat, MahaRERA had difficulty determining if the developer was at fault.

The absence of a mentioned possession date in the agreement for sale led to complications in determining whether the developer failed to meet their obligations.

RERA act, Section 18

Under Section 18 of the Real Estate Regulatory Act (RERA) from 2016, homebuyers can ask for interest if developers don’t deliver their homes on time. This section allows buyers to seek delayed possession interest and delayed possession compensation if the developer doesn’t complete the project as promised. However, to get this refund with interest, the developer must fail to finish the project within the agreed timeline.

Supreme Court judgments on delayed possession

In a recent case, the Supreme Court agreed with a decision made by the National Consumer Disputes Redressal Commission (NCDRC). This decision said that a builder had to return all the money paid by homebuyers because they had taken too long to deliver their flats. The builder was also ordered to pay 9% interest each year on the amount refunded. The court said homebuyers should immediately get their homes.

In another critical case, Pioneer Urban Land & Infrastructure Ltd. vs Govindan Raghvan, the Supreme Court clarified that builders can't force buyers to accept their flats after a significant delay. Buyers have the right to get their money back with interest if the builder delays the possession of their property.

MahaRERA's Verdict

MahaRERA’s recent order emphasized the importance of having a precise possession date mentioned in the agreement. Since the agreement lacked a specified possession date, MahaRERA decided to use the deadline provided by the developer, December 31, 2028.

This means that MahaRERA thought it was too early for the homebuyers to claim a refund or interest, given that the project was still supposed to be completed by that date.

This decision by MahaRERA has made people think about how important it is to have a clear and complete agreement when buying property. It highlights why knowing how to check the possession date in RERA is essential.

If the possession date is mentioned in the agreement, it can be easy to claim delayed possession interest or delayed possession compensation for delays.

Although this decision might seem unfair to the homebuyers, it shows the importance of having detailed and precise agreements. Homebuyers must ensure that their agreements specify possession timelines to protect their rights in case of delays.

If there’s no exact date, it can lead to issues when claiming delayed possession interest or delayed possession compensation.

MahaRERA Vs Supreme Court

Even though MahaRERA’s decision might not be what the homebuyers hoped for, it does give them the option to exit the project based on the terms written in the allotment letter and the agreement for sale. If the project is not going as planned, the buyers can choose to leave if they follow the agreement’s terms.

MahaRERA clearly stated that if the agreement does not specify the date of possession, in the absence of the possession date on the contract, that date specified in the RERA by the developer will be the final date of possession. As per RERA's rules, a developer cannot be penalized or forced to give interest to buyers.

However, the Supreme Court stated that after the continuous delays, the buyer is not bound to stick with the agreement and can back out.

Final Words

This case highlights how important contracts are for clearly stating all details, especially the possession date, in real estate transactions, knowing how to check the possession date in rera will help you to get essential and authentic details. Homebuyers can better protect their rights if there are delays by ensuring that agreements have clear timelines. 

MahaRERA’s decision shows the need for compliance with RERA rules for delayed possession and the importance of legal clarity. Understanding Supreme Court judgments on delayed possession and knowing the rules for claiming delayed possession interest and compensation is crucial for safeguarding homebuyers’ interests.