Builder demanding extra ₹3 lakh before handing over flat possession, is this legal?

Question

I bought a flat in Pune and am supposed to get possession next month. But now the builder is saying I need to pay an extra ₹3 lakh for some supposed 'advancements' made, or he won't hand over the keys. This wasn't mentioned in the original agreement! I'm really frustrated and don't know what to do. Is this even legal? How can I fight this? I need advice before taking the next step.

Adv. Preeti Saxena · Accepted Answer

It's understandable that you're frustrated, and it's crucial to approach this situation with caution. Let's break down the legality and your potential steps forward.

Firstly, the builder-buyer agreement is a critical document in your case. According to the Real Estate (Regulation and Development) Act, 2016, any changes in the cost or specifications of the property should be clearly documented and agreed upon by both parties. If the demand for an additional ₹3 lakh was not part of your original agreement, it could be considered illegal.

Section 13 of the RERA Act specifies that the promoter cannot demand any additional payment without first obtaining the consent of the allottee. If the builder is demanding additional payment without your consent, it could be a violation of this section.

Here are the steps you might consider taking:

Review Your Agreement: Carefully check the terms of your agreement. Look for any clauses that might allow for such additional charges under specific conditions. If such a clause exists, it must be explicit and clear.
Communicate in Writing: Send a formal letter or email to the builder requesting a detailed explanation of the charges. Make sure all communication is documented.
File a Complaint: If the builder's demand is indeed outside the bounds of your agreement, you can file a complaint with the Real Estate Regulatory Authority (RERA) in Maharashtra. They are tasked with resolving such disputes.
Legal Notice: Consider sending a legal notice to the builder. This is a formal way to assert your rights and can sometimes resolve the issue without further legal action.
Consumer Court: If the issue remains unresolved, you can approach the Consumer Court as this falls under the purview of deficiency in service under the Consumer Protection Act, 2019.

In the case of Fortune Infrastructure vs. Treesh Sundari (2013), the Supreme Court held that builders cannot unilaterally impose additional costs on buyers without their consent.

Be mindful of any deadlines. The limitation period for filing a complaint under RERA is one year from the date of possession as per the Act. It's advisable to act promptly to ensure your rights are protected.

Given the complexity of real estate transactions and the potential for state-specific variations, consulting with a legal expert in property law could provide tailored advice for your situation.

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Adv. Kavya Reddy · Answer

Hi there! I can completely understand your frustration with this situation. I looked into this carefully, and here's what I found regarding the legal aspects of your issue.

Firstly, the demand for additional payment by the builder, which was not stipulated in the original agreement, is generally not permissible under Indian law. The Real Estate (Regulation and Development) Act, 2016 (RERA, 2016) aims to protect buyers from such unfair practices. Under RERA, builders are required to adhere strictly to the terms and conditions outlined in the agreement for sale.

One thing I want to flag is that if the builder has registered the project under RERA, you can file a complaint with the Maharashtra Real Estate Regulatory Authority (MahaRERA). They have the authority to adjudicate on such matters and can direct the builder to comply with the original terms of the agreement.

There are actually a few important cases on this point. In the case of Ferani Hotels Pvt. Ltd. v. State Information Commission (2013), the Bombay High Court held that any additional charges not mentioned in the agreement are not legally binding on the buyer. Similarly, in DLF Universal Limited v. Director Town and Country Planning (2010), the Punjab and Haryana High Court emphasized that builders cannot impose arbitrary charges beyond what was agreed upon.

Here's what you can do next:

Review your agreement for sale thoroughly to confirm that the additional charge was not mentioned.
Check if the project is registered under MahaRERA. You can do this on the MahaRERA website.
If registered, consider filing a complaint with MahaRERA. They are known to handle such disputes effectively.
Document all communications with the builder, as this will be useful if you need to take legal action.
Consult with a local lawyer specializing in real estate to explore filing a consumer complaint or a suit for specific performance if necessary.

Please do share if there are any more details — I want to make sure you have everything you need. Stay strong, and I hope this helps you in resolving the matter!

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Adv. Vikram Nair · Answer

I'm really sorry to hear you're dealing with this frustrating situation. It sounds incredibly stressful, especially when you're so close to moving into your new home. The short answer is: No, the builder cannot legally demand extra money for advancements unless it was clearly outlined in your original agreement. Under the Real Estate (Regulation and Development) Act, 2016, any additional charges must be specified in the agreement of sale. If these charges were not part of the signed contract, the builder has no legal basis to demand them. Here's what you should do next: Review Your Agreement: Go through your sale agreement carefully to ensure there are no clauses that allow the builder to charge extra for advancements or modifications. Document Everything: Keep a record of all communications with the builder, including emails, messages, and any verbal discussions. This documentation will be crucial if legal action becomes necessary. Send a Legal Notice: Draft a legal notice to the builder, stating that their demand is not as per the agreed terms and conditions, and request them to hand over possession as per the original agreement. You can do this with the help of a lawyer. File a Complaint with RERA: If the builder does not respond to your legal notice, you should file a complaint with the Maharashtra Real Estate Regulatory Authority (MahaRERA). RERA is designed to protect home buyers and ensure that builders comply with the terms of the sale agreement. Consider Approaching

Adv. Dinesh Kumar · Answer

I can understand how frustrating and stressful this situation must be for you. You've been looking forward to getting possession of your flat, and now this unexpected demand is causing unnecessary worry.

The short answer is: No, the builder cannot legally demand extra money for 'advancements' unless it's clearly mentioned in your original agreement with them.

Under the Real Estate (Regulation and Development) Act, 2016 (RERA), builders are required to adhere to the terms specified in the agreement for sale. Any additional charges not mentioned in the agreement are not permissible. Section 13 of the Act specifically prohibits the promoter from demanding any more money than what is agreed upon without prior written consent from the buyer.

Here's what you can do next:

Review Your Agreement: Carefully check your original sale agreement to confirm that there is no clause allowing the builder to charge extra for such 'advancements'.
Send a Formal Notice: Draft a written notice to the builder, stating that the demand for extra payment is illegal and violates the RERA guidelines. Send this notice via registered post and keep a copy for your records.
File a Complaint with RERA: If the builder does not respond or insists on the extra payment, file a complaint with the RERA Authority in Maharashtra. You can do this online on the Maharashtra RERA website. RERA authorities are quite proactive in addressing such grievances.
Consider Legal Action: If the situation doesn’t resolve, you may also consider filing a case in the consumer forum for unfair trade practices and deficiency in service.

In my experience, builders often make such demands hoping the buyer will pay to avoid delays. However, RERA has empowered buyers significantly, and the authorities tend to side with buyers in such situations. A notable case is Fortune Infrastructure vs. Trevor D'Lima (2018 SC), where the Supreme Court held that builders cannot demand additional charges not agreed upon.

Do note, there might be a limitation period for filing complaints, so it's best to act promptly.

Stay strong, and don't hesitate to stand your ground. Feel free to share the actual agreement details if you need more specific advice on any clauses.

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Builder demanding extra ₹3 lakh before handing over flat possession, is this legal?

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