What can a buyer do when the agreement does not specify the date of possession?

By Abhay Harish Shah, Realty Quarter

There have been numerous cases where home buyers have faced delays in acquiring their apartments. In many cases, delays are over five to six years. Some developers even did not mention the date of possession in the agreement which resulted in the home buyers suffering from financial and mental trauma.

The Maharashtra Real Estate Regulatory Authority (MahaRERA), taking note of this problem, recently ruled that, for failing to hand over possession and keeping the date of possession clause empty in the registration agreement, Skyline Construction Company to refund Rs 1.06 crores, with an interest of 10.55% to Actor Vrajesh Hirjee. Authority also asked the builder to refund tax deducted at source (TDS) and stamp duty paid by Hirjee.

A similar case happened with a buyer named as Aparna Singh, who had invested in a residential project in Thane area but, because of the absence of the possession date in the sale agreement, she was unable to get the claim for interest relief under section 18 of the RERA Act. In this case, although no date was specified in the agreement, the RERA tribunal ordered the developer to pay interest to her.

What can a buyer do when the agreement does not specify the date of possession?

Various courts of law have considered the issue of the lack of an exact date of possession in the agreement or a lack of a date from which the date of possession can be calculated. Sulaiman Bhimani, a Civic Justice Forum activist and Chairman of the RTI, who has dealt with numerous cases in this field says, “To escape laws without specifying the date, this trick is being adopted by developers. In the Hirjee case, the real estate authority solved the issue, even though the date of possession was not specified in the agreement. Previously, no clarity existed on recourse to such issues. Home buyers can now approach the consumer court or RERA to complain about the builder’s promise or about unreasonable delays. Also, if a builder is not fulfilling his commitments and is delivering the apartment, a buyer can challenge his/her dissatisfaction about the flat within 60 days to the appellate tribunal. The next appeal against the order of the appellate tribunal can be filed in the high court of the respective states.

Important Points to check before signing a Property Agreement:

1) The home buyer should look for projects registered under RERA and the draft agreement on the website.

2) The agreement should be checked by an advocate, to verify whether it conforms to the RERA.

3) The buyer should also check the date of possession mentioned in the agreement and the ‘grace period’ if any.

4) Ideally, six months should be the maximum grace period, from the date of possession specified in the agreement.

5) As per the Maharashtra Ownership of Flats Act, 1963 (MOFA), the exact date of possession should be disclosed in the agreement of sale.

6) A specific provision in the Agreement may also be included, called the compensation clause, where the developer is bound to pay the purchaser a specified amount each month in the event of a failure to complete a project by the date mentioned in the Agreement.