Q. If the builder does not deliver the flat to the home buyer as per agreed timelines what relief does RERA offer? What action can be taken against the builder?
Ashish Taskar, Thane
A. RERA has established that time is of the essence in agreements for sale, requiring both the builder (promoter) and homebuyer (allottee) to adhere to agreed timelines. If the homebuyer delays installment payments, they must pay interest on the defaulted amount at the prescribed rate. Conversely, if the promoter fails to deliver possession on time, the homebuyer has two options: withdraw from the project or continue despite the delay.
In case of withdrawal due to delay, section 18(1) mandates that the promoter refund the entire amount paid by the homebuyer, along with interest at marginal cost of fundbased lending rate (MCLR) + 2% per annum, calculated from the dates the payments were received to the date of refund. Additionally, the promoter must compensate for losses incurred by the homebuyer. section 19(4) reinforces the homebuyer’s right to a full refund with interest and compensation.
If the homebuyer opts to stay in the project despite the delay, the promoter must pay monthly interest at MCLR + 2% per annum for the period of delay, as per the proviso to section 18(1). The Supreme Court has emphasised that this right to refund and interest is non-negotiable (Newtech Promoters and Developers Ltd v State of UP and others). In case of prolonged delays, homebuyers can collectively seek revocation of the project’s registration under section 7. MahaRERA can revoke registration if the promoter defaults or engages in unfair trade practices, such as failing to meet possession timelines. Alternatively, under section 7(3), MahaRERA may allow the registration to continue with additional conditions to protect homebuyers’ interests, which can help revive stalled projects.
Q. My builder has charged me 18% interest per annum for my delay in paying the last two installments. When questioned about such a high interest rate he said that it is as per the Agreement which is pre-RERA Agreement and MahaRERA interest is not applicable to pre-RERA Agreements. Is it true? Further, the builder has also delayed the delivery of the flat about which he is not ready and willing to pay me interest on the amount I have paid and he is giving some excuses for the delay?
Pramod Sulakhe, Kalyan
A. Any project registered with MahaRERA under RERA the interest payable is governed by RERA. RERA defines interest and states that the rate of interest chargeable from the allottee (homebuyer) by the promoter (builder) in case of default shall be equal to the rate of interest, which the promoter shall be liable to pay the allotte, in case of default. The interest rate prescribed by Maharashtra government for MahaRERA is marginal cost of fund based lending rate (MCLR) plus 2% per annum.
If your project is registered with MahaRERA, your builder cannot charge 18 % interest per annum for any default on your part, even though your agreement is pre-RERA. You can file a formal complaint to MahaRERA for overcharging. Further you can also claim in this complaint interest from your builder for delay in giving possession. Instead of filing a formal complaint, at MahaRERA, you may opt for resolution of your dispute through MahaRERA conciliation. For further details MahaRERA conciliation you may visit MahaRERA website.
(Adv Shirish V Deshpande, chairman Mumbai Grahak Panchayat Email: [email protected])
