Builder asking for extra ₹3 lakh before giving possession, what can I do?

Question

Hi, I'm from Pune and my builder is refusing to give possession of my flat unless I pay an additional ₹3 lakh. The agreement was signed two years ago, and I've already paid the full amount mentioned. He's saying it's for 'unforeseen expenses' but never mentioned this before. I'm feeling trapped and stressed as my planned move-in date is next month. What legal actions can I take against him? Can he do this legally?

Adv. Faisal Khan · Accepted Answer

I understand how frustrating and stressful this situation must be for you, especially when you're all set to move into your new home. Let's break down your options. The short answer is: No, the builder cannot legally demand additional money beyond what was agreed upon in your original agreement unless there's a specific clause allowing such charges. Under the Real Estate (Regulation and Development) Act, 2016 (RERA), builders are required to adhere to the terms of the agreement. Any demand for extra charges must be justified and previously agreed upon in the contract. Here's what you can do: Review Your Agreement: Check your sale agreement for any clauses that mention additional charges or unforeseen expenses. If there’s no such clause, the builder’s demand is likely unjustified. Send a Legal Notice: Draft a legal notice to the builder, demanding possession as per the original agreement and stating that the additional demand is unlawful. Mention the absence of any clause justifying this extra charge. File a Complaint with RERA: If the builder does not respond or continues to demand extra money, file a complaint with the Maharashtra RERA authority. They are specifically established to handle disputes between homebuyers and builders. Approach the Consumer Forum: You can also file a complaint with the District Consumer Disputes Redressal Forum for deficiency in service and unfair trade practice. Document Everything: Keep records of all communications with the builder, including emails, letters, and notices. This documentation will be crucial if legal proceedings are necessary. In my experience, builders often back down once a legal notice is sent, as they are aware of the stringent requirements under RERA. The courts and RERA authorities generally take a firm stand against arbitrary demands by builders. Time Limits: You should act promptly. Generally, the limitation period for filing a complaint under RERA is 5 years from the date of cause of action, but it's best to a

Adv. Asha Pillai · Answer

I'm sorry to hear about the situation you're facing. Let's go through the legal options available to you under Indian law.

Firstly, it's important to know that a builder cannot demand any amount beyond what was agreed upon in the sale agreement, unless there is a specific clause that allows for such adjustments due to unforeseen circumstances. You should review your agreement to check for any such clauses.

Given your situation, here are the steps you can consider:

Review the Agreement: Check your sale agreement for any clauses related to additional charges or unforeseen expenses. If no such clause exists, the demand for extra payment is not legally justified.
File a Complaint with RERA: As you are in Pune, the Real Estate (Regulation and Development) Act, 2016 (RERA, 2016) is applicable. You can file a complaint with the Maharashtra Real Estate Regulatory Authority (MahaRERA). RERA mandates that builders cannot charge beyond the agreed amount without proper justification.
Consumer Court: You can file a complaint in the consumer court for unfair trade practices under the Consumer Protection Act, 2019. This act protects buyers from such unethical demands.
Legal Notice: Consider sending a legal notice to the builder demanding possession as per the original agreement. This can sometimes prompt the builder to comply without further legal action.
File a Civil Suit: If these steps do not resolve the issue, you may consider filing a civil suit for specific performance of the contract in a civil court.

In terms of legal precedents, the Fortune Infrastructure vs. Trevor D'Lima & Ors (2018) case is relevant. The Supreme Court held that builders cannot demand additional amounts arbitrarily and must adhere to the terms of the contract.

Time is of the essence here. Ensure you file any complaints or legal actions promptly to avoid delays in possession.

Lastly, if you are part of a group of buyers facing similar issues with the same builder, consider forming an association or group to strengthen your case.

I hope this helps you take the necessary steps to resolve your issue. Feel free to reach out if you have more questions or need further guidance.

📚 References

Adv. Aditya Khanna · Answer

I'm sorry to hear about your predicament. Builders demanding extra money before handing over possession is not uncommon, but it is often unjustified and legally questionable. Let me guide you through the legal actions you can take under Indian law. First, let's address whether the builder can legally demand this additional amount. Under the Real Estate (Regulation and Development) Act, 2016 (RERA), builders are required to adhere strictly to the terms of the agreement for sale. Any demand for additional charges that were not previously agreed upon is likely to be a violation of this Act. Section 13(2) of RERA states: "The promoter shall not accept a sum more than ten percent of the cost of the apartment, plot, or building as an advance payment or an application fee, without first entering into a written agreement for sale." In your case, since you have already paid the full amount as per the agreement, the builder's demand for an extra ₹3 lakh is unjustified unless there is a specific clause in your agreement that allows for such additional charges under specified circumstances. Here are the steps you can take: Review the Agreement: Go through your sale agreement to check if there is any clause that allows the builder to charge extra for unforeseen expenses. If there is no such clause, the demand is likely illegal. File a Complaint with RERA: You can file a complaint with the Maharashtra Real Estate Regulatory Authority (MahaRERA). RERA is specifically designed to address dis

Adv. Shreya Bose · Answer

I'm really sorry to hear about the situation you're in. It must be incredibly frustrating to be ready to move into your new home only to face unexpected demands. Let's break down what you can do legally here. The short answer: No, the builder cannot legally demand an additional ₹3 lakh after you've already paid the full amount agreed upon in the contract. Under the Real Estate (Regulation and Development) Act, 2016 (RERA), builders are required to adhere to the terms of the sale agreement. Any additional charges not specified in the contract are generally not permissible. Section 13 of the RERA Act prohibits builders from taking more than 10% of the cost as an advance without a written agreement. Furthermore, any demand for additional charges should have been clearly outlined in your initial agreement. Here's what you can do next: Review your agreement: Check the sale agreement carefully to see if there is any clause that allows the builder to charge for 'unforeseen expenses'. If there isn't, the demand is likely unjustified. Send a formal notice: Draft a legal notice to the builder stating that their demand is not in compliance with the agreement and the RERA Act. Mention that you are prepared to take legal action if possession is not granted. File a complaint with RERA: If the builder does not respond or continues to demand the extra payment, file a complaint with the Maharashtra Real Estate Regulatory Authority (MahaRERA). This authority specifically handles disputes betwe

Builder asking for extra ₹3 lakh before giving possession, what can I do?

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