Telangana RERA penalizes builder for project delay, directs payment of interest to buyer until flat handover.

HYDERABAD: The Telangana State Real Estate Regulatory Development Authority (RERA) has ruled that a builder must compensate a homebuyer with interest for the delay in handing over his flat, ensuring that the complainant is financially reimbursed for the prolonged wait.

The case was brought forward by Kollepara Veera Venkata Satya Vara Prasad, who purchased a flat in Block II of the residential project ‘Parijatha Pride.’ Prasad alleged that despite making payments amounting to ₹27.50 lakh between October 2020 and November 2021, the builder, Parijatha Homes & Developers Pvt. Ltd., failed to deliver possession of the flat within the agreed timeframe. As per the terms of the sale deed, the possession was contractually due by December 2021.

Prasad stated that the continuous delays had placed a heavy financial burden on him, as he was forced to pay monthly home loan EMIs while still unable to occupy his flat.

He further explained that in a meeting of flat buyers held on November 10, 2023, the builder had reassured him and other buyers that the flat would be handed over by January 31, 2024.

To compensate for any further delays, the builder had also committed to paying him ₹7,500 per month as rental reimbursement starting from February 28, 2024.

However, when the builder failed to meet this deadline and did not honor the agreed compensation, Prasad filed a complaint with RERA, seeking justice and financial relief.

In response to the allegations, the builder argued that the delays were caused by circumstances beyond its control. They cited the COVID-19 pandemic, shortages of skilled labor, and rising construction material costs as key reasons for the project’s slow progress.

Furthermore, the builder pointed out that a registered sale deed had already been executed on April 17, 2021, which, according to them, indicated that possession had technically been given. They claimed that the complainant’s inability to move into the flat was due to the lack of an occupancy certificate, which had not yet been obtained.

After carefully examining the submissions from both parties, RERA members K. Srinivasa Rao and Laxminarayana Jannu ruled in favor of the complainant. The regulatory authority concluded that the builder had failed to meet its contractual obligations and therefore needed to rectify the situation.

RERA has directed the builder to complete all pending construction work and formally hand over the flat to the complainant within the next 90 days.

Additionally, the authority has ordered the builder to pay interest at an annual rate of 11.1% on the total amount paid by the complainant, with interest calculations starting from January 1, 2022, and continuing until possession is officially transferred.

The builder has also been instructed to secure the necessary occupancy certificate at its own cost and ensure that a copy is provided to the complainant at the time of handover.

Furthermore, RERA has issued a stern warning to the builder, stating that any failure to comply with its directives will result in strict penalties under Section 63 of the Real Estate (Regulation and Development) Act, 2016. This section allows for punitive action against developers who disregard regulatory decisions, ensuring accountability in the real estate sector.