Builder asking for extra ₹3 lakh for flat registration in Pune, is this legal?

Question

I purchased a flat from a builder in Pune and paid the full amount as per the agreement. Now, he is demanding an additional ₹3 lakh before proceeding with the flat registration. He threatens to cancel the deal if I don't pay. I'm confused and anxious as this wasn't in the original contract. Is this legal and what should I do to protect my investment?

Adv. Rohit Verma · Accepted Answer

Hi there, I can imagine how stressful it must be to face unexpected demands like this after already committing financially. Let's break this down and see how you can tackle it.

In short, demanding extra money for registration beyond the agreed terms is not legal. If this demand wasn't part of your original agreement, the builder is acting outside the contract's terms.

Under the Real Estate (Regulation and Development) Act, 2016 (RERA), builders are required to adhere strictly to the terms agreed upon in the sales agreement. Any deviation, such as demanding additional payments, could be considered a breach of contract. This Act protects home buyers from such practices and mandates transparency and fairness.

First, check your sale agreement to confirm that there is no clause allowing the builder to demand additional payment for registration.
Send a written notice to the builder, ideally through registered post, stating that their demand is not in accordance with the agreement and that you expect them to proceed with the registration without any additional payment.
If the builder persists, file a complaint with the Maharashtra Real Estate Regulatory Authority (MahaRERA). They have the authority to handle such disputes and can direct the builder to honor the original terms.
Consider lodging a complaint with the local consumer forum as well, as this can add pressure and serve as a parallel route for seeking redressal.

In my experience, builders often try to leverage the situation by making such demands, hoping the buyer will comply to avoid delays. However, the courts have consistently ruled against such practices. For instance, in the case of Kavita Sharma vs. MahaRERA (2018 Bombay High Court), the court upheld the buyer's rights under RERA, emphasizing that builders cannot impose additional charges not stipulated in the agreement.

Remember, time is crucial here. Ensure that you act promptly to avoid any delay that might be used against you. RERA complaints should ideally be filed as soon as possible to prevent further complications.

Feel free to share more details or the actual agreement if you need a closer look at specific clauses. I'm here to help you navigate this situation.

📚 References

Adv. Anjali Gupta · Answer

I understand how stressful and frustrating this situation must be for you. You've already fulfilled your part of the agreement, and now facing unexpected demands can be both confusing and financially burdensome. Short Answer: No, it is not legal for the builder to demand an additional ₹3 lakh for flat registration if this amount was not included in the original agreement. Under the Real Estate (Regulation and Development) Act, 2016, any additional charges not specified in the agreement are generally unlawful. Builders cannot unilaterally alter the terms of the agreement or demand extra money beyond what was agreed upon, especially under the threat of cancellation. Practical Next Steps: Review Your Agreement: Carefully read your sale agreement to confirm the terms regarding payment and registration costs. Ensure there is no clause that allows the builder to demand extra charges. Document Everything: Keep a record of all communications with the builder, including emails, messages, and any written notices demanding additional payment. Send a Legal Notice: Draft a legal notice to the builder through a lawyer, stating that their demand is illegal and not part of the original agreement. Request them to proceed with registration as per the agreed terms. File a Complaint: If the builder persists, file a complaint with the Maharashtra RERA Authority. They can take action against the builder for such unfair practices. Consider Legal Action: If necessary, you can approach the consumer c

Adv. Krishnaswamy Iyer · Answer

The situation you are facing is indeed concerning, and it's essential to understand the legal framework surrounding such demands by builders. The foundational case here is DLF Ltd. v. Manmohan Lal (2004), where the Supreme Court emphasized that a builder cannot unilaterally alter the terms of a contract without the consent of the buyer. Let's delve into the relevant legal principles: 1. **Contractual Obligations**: Under the Indian Contract Act, 1872, a contract is binding as per the terms agreed upon by both parties. If your original agreement with the builder did not mention this additional payment, demanding it now could constitute a breach of contract. 2. **RERA Regulations**: The Real Estate (Regulation and Development) Act, 2016 (RERA) is particularly relevant here. RERA mandates that builders must adhere to the terms of the agreement and ensures protection for buyers against such arbitrary demands. Under RERA, you can file a complaint with the Maharashtra Real Estate Regulatory Authority if the builder is registered under this Act. 3. **Consumer Protection**: You might also consider approaching the consumer forum. The Consumer Protection Act, 2019 provides remedies for unfair trade practices, which includes making additional demands not stipulated in the contract. The courts have also addressed similar issues in Ghaziabad Development Authority v. Balbir Singh (2004), where it was held that any additional charges not agreed upon in the original contract cannot be impose

Adv. Arjun Menon · Answer

Here's the practical breakdown. If the builder is demanding an extra ₹3 lakh that was not agreed upon in your original contract, this demand is likely not legal. The short answer is that you should not have to pay any amount not stipulated in your agreement.

Key Legal Aspects:

Agreement Terms: The terms of payment, including the total consideration for the flat, should be clearly mentioned in your sale agreement. Any demand beyond this is generally unenforceable.
RERA Compliance: Under the Real Estate (Regulation and Development) Act, 2016, builders must adhere to the terms agreed upon and cannot unilaterally change the price.
Consumer Protection: This could be a case of unfair trade practice under the Consumer Protection Act, 2019. You have the right to file a complaint with the consumer forum.

Legal Precedents:

In Fortune Infrastructure vs. Trevor D'Lima & Ors (2018), the Supreme Court held that builders cannot demand additional amounts beyond what was agreed in the contract.

Actionable Steps:

Review Your Agreement: Go through your sale agreement carefully to confirm the payment terms.
Communicate in Writing: Send a written communication to the builder stating that their demand is not in line with the agreement terms and that you will not be paying any additional amount.
File a Complaint: Consider filing a complaint with the Real Estate Regulatory Authority (RERA) in Maharashtra and the consumer forum. This will put legal pressure on the builder to adhere to the agreed terms.
Seek Legal Advice: Consult with a local lawyer who specializes in real estate matters to explore further legal remedies.

The most important thing right now is to document all communications with the builder and act swiftly to file a complaint if the builder persists with this demand. Don't delay this.

📚 References:

Builder asking for extra ₹3 lakh for flat registration in Pune, is this legal?

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