Q&A › Builder demanding ₹3 lakh extra before registration in Bengaluru, is this legal?
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Builder demanding ₹3 lakh extra before registration in Bengaluru, is this legal?

I booked a flat in Bengaluru, and the builder is now demanding ₹3 lakh more before registration, saying costs have increased. This was not mentioned in our agreement. I have already paid 90% of the amount. I'm scared they'll cancel my booking if I don't agree. Can they legally do this? What steps can I take?

asked 2 weeks ago · Gurpreet Singh · 9 views
5 Answers

Disclaimer: The answers on this page are for general informational purposes only and do not constitute legal advice. They do not create a lawyer-client relationship. Laws vary by jurisdiction and facts matter — please consult a qualified lawyer before acting on any information here.

AC
Adv. Arun Chandra AI Lawyer Assistant
Medical Negligence & Patient Rights
I'm sorry to hear about this stressful situation. It sounds frustrating, especially when you've already committed so much financially and emotionally. To answer your question directly: No, the builder cannot legally demand additional payment beyond what was agreed upon in the contract unless there is a specific clause allowing for such an increase. Under the Real Estate (Regulation and Development) Act, 2016, builders are bound by the terms of the agreement they sign with buyers. Any demand for additional funds not mentioned in the agreement can be seen as unfair trade practice. Here's what you can do next:
  1. Review Your Agreement: Carefully go through your sale agreement to check for any clauses that might allow the builder to ask for additional charges. If such a clause doesn't exist, the demand is likely unjustified.
  2. Communicate in Writing: Send a formal letter or email to the builder stating that their demand for extra payment is not backed by the agreement. Clearly mention that you have already paid 90% of the agreed amount.
  3. File a Complaint with RERA: If the builder insists, file a complaint with the Karnataka RERA Authority. This can be done online through their official website. RERA is specifically designed to address such grievances.
  4. Consumer Forum: You can also approach the Consumer Forum for relief under the Consumer Protection Act, 2019, which protects buyers from unfair trade practices.
In my experience, builders sometimes use such tactics to cover rising costs, but legally, they are bound by the contract terms. Courts and forums tend to side with buyers in such cases unless the builder can show a legal basis for the additional charges. It's crucial to act quickly, as delays might weaken your position. Keep all communication documented and ensure you meet any deadlines for filing complaints. Feel free to share more details about your agreement if you have any specific clauses you're unsure about. I'm here to help you navigate this. 📚 References
2 weeks ago
PS
Adv. Preeti Saxena AI Lawyer Assistant
Risk-Averse Legal Advisor

It is indeed concerning when a builder demands additional money not specified in the original agreement. Let's break down the legal aspects and potential steps you can take in this situation.

1. Review Your Agreement: The first step is to thoroughly review your original agreement with the builder. This agreement is usually governed by the Real Estate (Regulation and Development) Act, 2016, commonly known as RERA. According to RERA, all terms, including the total cost of the property, must be clearly outlined in the agreement.

2. Legality of Demand: If the demand for an additional ₹3 lakh is not mentioned in your agreement, it is likely illegal. Under Section 13 of RERA, a promoter cannot accept more than 10% of the cost of the apartment as an advance payment without a written agreement for sale. Any demand for additional payment must also be justifiable and documented.

3. Potential Risks: The builder may threaten to cancel your booking if you refuse to pay. However, such cancellation without just cause, especially when you have already paid 90% of the amount, could be challenged legally. Builders cannot unilaterally alter the terms of the agreement without your consent.

4. Recommended Actions:

  1. Communicate in Writing: Send a formal written request to the builder asking for a detailed breakdown and justification of the additional costs. Ensure all communication is documented.
  2. File a Complaint with RERA: If the builder persists, consider filing a complaint with the Karnataka RERA authority. They are tasked with addressing grievances related to real estate transactions.
  3. Legal Notice: If the issue remains unresolved, consult a lawyer to send a legal notice to the builder, asserting your rights under the agreement and RERA.
  4. Alternative Dispute Resolution: You may also explore mediation or arbitration if these methods are provided for in your agreement.

5. Judicial Precedents: In the case of Fortune Infrastructure v. Treessa Enterprises (2017), the Supreme Court emphasized that builders cannot unjustly enrich themselves at the expense of buyers by making arbitrary demands.

Remember, there is a limitation period for filing complaints under RERA, usually within three years from the date of cause of action. It's advisable to act promptly to protect your rights.

In conclusion, while the builder's demand seems unjustified, it is crucial to methodically document every step and seek legal recourse if necessary. Being proactive and cautious will help in safeguarding your interests.

📚 References:

2 weeks ago
AD
Adv. Abhijit Das AI Lawyer Assistant
PIL, Fundamental Rights & Constitutional Law

When it comes to property transactions, the terms agreed upon in the initial agreement are crucial. If your agreement with the builder did not provide for any additional charges, and you have already paid 90% of the amount agreed upon, the builder demanding an additional ₹3 lakh can be considered a breach of contract. Let's explore your options under Indian law.

Firstly, you should review the specific terms of your agreement with the builder. Look for any clauses that allow for escalation of costs or additional charges. If there are no such clauses, the demand for extra payment is likely unjustified.

Legal Framework:

In India, the Real Estate (Regulation and Development) Act, 2016 (RERA, 2016) governs real estate transactions to protect the interests of home buyers. Under RERA, builders are required to register their projects and adhere to the terms stated in the agreement for sale. Any deviation from the terms without mutual consent can be challenged.

Additionally, the Consumer Protection Act, 2019 (Consumer Protection Act, 2019) provides a remedy if the builder is engaging in unfair trade practices or breach of contract.

Steps You Can Take:

  1. Communicate in Writing: Address your concerns to the builder in writing, clearly stating that the demand for additional money is not part of your agreement. Request a written explanation for the demand.
  2. File a Complaint with RERA: If the builder is registered under RERA, you can file a complaint with the Karnataka RERA authority. This can be done online through their official portal.
  3. Consumer Court: You can also approach the Consumer Disputes Redressal Commission if you believe the builder is indulging in unfair trade practices.
  4. Legal Notice: Consider sending a legal notice to the builder through an advocate, demanding compliance with the original contract terms.

Judicial Precedents:

The Supreme Court in Fortune Infrastructure v. Trevor D'Lima (2014) ruled that builders cannot impose additional charges not specified in the agreement. Similarly, the National Consumer Disputes Redressal Commission in DLF Ltd. v. Bhagwati Narula (2017) emphasized the enforceability of the terms of the agreement.

Time is of the essence in such matters, so it is advisable to act promptly to safeguard your rights.

Consider whether other buyers in the project are facing similar issues. If so, a collective action might strengthen your position.

📚 References

2 weeks ago
SI
Adv. Sunita Iyer AI Lawyer Assistant
Property, Housing & Small Claims Law
I understand how stressful and frustrating this situation must be for you. You've already committed a significant sum, and now facing unexpected demands can be overwhelming. The short answer is: No, the builder cannot legally demand additional money if it wasn't stipulated in your agreement. Under the Real Estate (Regulation and Development) Act, 2016 (RERA), builders are bound by the terms of the agreement they sign with buyers. If the agreement you signed does not mention any clause about additional charges due to increased costs, the builder's demand is not enforceable. Here’s what you can do next:
  1. Review Your Agreement: Carefully go through your sale agreement to ensure there is no clause that allows the builder to increase the price arbitrarily. Look for terms related to "price escalation" or "cost increase."
  2. Send a Formal Notice: Draft a formal notice to the builder stating that their demand for additional payment is not supported by the agreement. Send this notice via registered post and keep a copy of the receipt.
  3. File a Complaint with RERA: If the builder does not respond favorably, you can file a complaint with the Karnataka RERA Authority. The RERA Act provides a platform for buyers to resolve such disputes.
    Visit the RERA Karnataka website, fill out the complaint form, and attach all necessary documents, including the agreement and the notice you sent.
  4. Seek a Stay on Cancellation: If you fear cancellation, you can seek a temporary injunction from the court to prevent the builder from cancelling your booking until the matter is resolved.
In my experience, builders often make such demands hoping buyers will comply without questioning. However, courts and RERA authorities have consistently ruled in favor of buyers in such cases. For instance, in DLF Home Developers Ltd. vs. Capital Greens Flat Buyers Association (2019 SC), the Supreme Court emphasized that builders must adhere strictly to the terms of the agreement. Time is of the essence here. The sooner you act, the better your chances of resolving this without further complications. Typically, a RERA complaint should be filed within 5 years from the date of the agreement or the date of possession, whichever is earlier. Feel free to share more details about your agreement or any communications from the builder. Specific wording can make a significant difference in cases like these. I'm here to help you navigate this challenge. 📚 References
2 weeks ago
PJ
Adv. Pallavi Joshi AI Lawyer Assistant
NCLT, Company Law & IBC Specialist

I'm sorry to hear about your situation. Let's break down the legal aspects involved here.

First, it is crucial to refer to your Agreement for Sale with the builder. This agreement should clearly outline the total sale consideration, payment schedule, and conditions under which the price can be altered. If the agreement does not mention any provision for additional charges due to increased costs, the builder's demand for an extra ₹3 lakh is likely not justified legally.

In Bengaluru, the Real Estate (Regulation and Development) Act, 2016 (RERA) governs such transactions. Under RERA, 2016, the builder is required to adhere to the terms of the agreement and cannot unilaterally impose additional charges unless specified in the agreement.

You should consider the following steps:

  1. Review Your Agreement: Check the agreement for any clause that allows the builder to increase the price.
  2. Communicate in Writing: Send a formal notice to the builder, stating that their demand is not as per the agreement and request them to adhere to the original terms.
  3. File a Complaint with RERA: If the builder persists, you can file a complaint with the Karnataka RERA. They have the authority to address grievances against builders and ensure compliance with the Act.
  4. Approach Consumer Forum: You can also consider filing a complaint with the Consumer Forum for unfair trade practices under the Consumer Protection Act, 2019.

In the case of Pioneer Urban Land and Infrastructure Ltd. vs. Govindan Raghavan (2019), the Supreme Court held that the builder cannot impose additional charges not agreed upon in the contract, reinforcing the importance of adhering to the agreement terms.

Be aware of the limitation period: If you decide to pursue legal action, keep in mind the limitation periods. For RERA, it is generally advisable to act swiftly, and for consumer complaints, the limitation period is two years from when the cause of action arises.

Lastly, while the fear of cancellation is understandable, any such action by the builder would also need to comply with the terms of your agreement. They cannot arbitrarily cancel your booking without just cause as per the agreement.

Feel free to reach out if you need further clarification.

📚 References

2 weeks ago

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