Builder demanding extra ₹3 lakh before handing over my flat in Pune?

Question

I booked a flat in Pune 2 years ago and have paid all the agreed installments on time. Now the builder is asking for an extra ₹3 lakh citing increased material costs and refuses to hand over the possession until I pay. I'm feeling cheated and don't know what to do. Is it legal for the builder to demand more money? Can I take legal action to get possession without paying this extra amount?

Adv. Priya Mehta · Accepted Answer

I'm sorry to hear about the situation you're facing with your flat purchase. It must be incredibly frustrating to deal with unexpected demands after fulfilling your end of the agreement.

No, it is not legal for the builder to demand additional money beyond what was agreed upon in your contract unless there is a specific clause that allows for such an increase due to material costs.

Under the Real Estate (Regulation and Development) Act, 2016, builders are required to adhere to the terms of the sale agreement. Any arbitrary demand for additional payment can be challenged as it violates this Act.

Here's what you can do next:

Review Your Agreement: Check your sale agreement to see if there is any clause related to price escalation due to increased material costs. If there is no such clause, the demand is likely unjustified.
Send a Legal Notice: Draft a legal notice to the builder demanding possession of the flat without any additional payment, citing the terms of your agreement and the RERA provisions.
File a Complaint with RERA: If the builder does not comply, you can file a complaint with the Maharashtra Real Estate Regulatory Authority (RERA). They have the authority to enforce the terms of the agreement and ensure that builders comply with the law.
Approach the Consumer Court: If RERA does not resolve the issue, you can file a complaint in the consumer court for deficiency in service and unfair trade practice.

In my experience, builders often attempt to pressure buyers into paying additional amounts by withholding possession. However, the courts and RERA authorities generally take a dim view of such practices, especially when there is no contractual basis for the demand.

Do note that there is a limitation period for filing complaints, so it is advisable to act swiftly. Generally, the limitation period to file a complaint in consumer court is two years from the date of cause of action.

I encourage you to take these steps promptly, and if you have any specific terms from your agreement you'd like to share, feel free to do so. The exact wording can be crucial in such matters.

📚 References:

Adv. Manish Tiwari · Answer

Before you proceed, there are three things I want you to be aware of. First, the legality of the builder's demand. Second, the potential remedies available to you. Third, the procedural steps involved in seeking relief. 1. **Legality of the Builder's Demand**: The obvious risk here is that the builder may have included a clause in the agreement allowing for escalation of costs. However, the non-obvious risk is that such a clause, if not clearly defined or if unreasonable, may not be enforceable. As per the Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, any demand by the builder must be in accordance with the terms of the agreement. Section 13 of RERA mandates that the promoter shall not accept more than 10% of the cost without entering into a written agreement. If the agreement does not expressly allow for such additional charges, the demand could be illegal. 2. **Potential Remedies**: You have the option to file a complaint with the RERA authority in Maharashtra. The RERA mechanism is designed to address grievances such as these. Additionally, you can seek relief through a consumer court under the Consumer Protection Act, 2019, as this situation may amount to an unfair trade practice. The downside scenario you need to plan for is the time and effort involved in legal proceedings, which can be extensive. 3. **Procedural Steps**: Before taking legal action, I recommend sending a formal notice to the builder stating your position and demanding the p

Adv. Anand Murthy · Answer

I'm sorry to hear about your situation. Let's break this down so you can understand your rights and the steps you can take under Indian law.

First, it's important to understand that the builder cannot unilaterally demand extra money unless there is a specific provision for such an increase in your agreement. Generally, the price agreed upon in the sale agreement is binding, and any change would require mutual consent.

Here's what you can do:

Review Your Agreement: Check your sale agreement for any clause that allows the builder to increase the price due to rising material costs. If there is no such clause, the builder's demand is not justified.
RERA Complaint: Since your property is in Pune, it falls under the jurisdiction of the Maharashtra Real Estate Regulatory Authority (MahaRERA). You can file a complaint with MahaRERA. Under the Real Estate (Regulation and Development) Act, 2016, builders must adhere to the terms of the agreement, and any arbitrary demand for additional money can be challenged.
Consumer Court: You can also file a complaint in the Consumer Forum for "deficiency of service" and "unfair trade practice." The builder's refusal to hand over possession without an unjustified extra payment could be considered such a practice.
Legal Notice: Consider sending a legal notice to the builder as a first step. Sometimes, a well-drafted legal notice can prompt the builder to reconsider their stance.

Regarding court judgments, in the case of Fortune Infrastructure v. Trevor D'Lima (2014), the Supreme Court held that builders cannot charge additional money beyond the terms of the agreement without the consent of the buyer.

Do remember that if you decide to take legal action, there are limitation periods. For example, consumer complaints usually need to be filed within two years from the date of the cause of action.

It's advisable to consult with a lawyer who can provide personalized advice based on the specifics of your agreement and guide you through the legal process.

Stay firm, and don't let the builder pressure you into paying unjustified charges. You have legal avenues to ensure your rights are protected.

📚 References

Adv. Rohit Verma · Answer

I'm really sorry to hear about the situation you're in. It's frustrating when a builder suddenly demands extra money after you've fulfilled your part of the agreement. Let's break this down to see where you stand legally.

Short Answer: No, the builder cannot legally demand extra money if it's not specified in the original agreement you signed. You have the right to take legal action to get possession without paying the additional amount.

Under the Real Estate (Regulation and Development) Act, 2016, builders are required to adhere to the terms of the sale agreement. Any demand for additional charges not mentioned in the agreement is generally considered unfair and is not enforceable.

Practical Next Steps:

Review your sale agreement: Check the agreement for any clause that allows the builder to increase costs due to material price changes.
Send a legal notice: Draft a legal notice to the builder demanding the possession of your flat as per the original terms. Mention that their demand is illegal and you will take action if they don't comply.
File a complaint with RERA: If the builder does not respond or refuses to comply, file a complaint with the Maharashtra RERA Authority. They handle such disputes and can enforce the terms of the agreement.
Consider approaching the consumer court: As a consumer, you can also file a case in the consumer court for deficiency in service and unfair trade practices.

Real-World Context: In my experience, builders often try to pass on increased costs to buyers, but courts and authorities like RERA have generally sided with buyers in such disputes, provided there's no clause allowing for cost escalation. Builders might argue that costs have genuinely increased, but unless it's contractually agreed, this argument doesn't hold much weight legally.

Time Limits & Risks: It's crucial to act promptly. File your complaint with RERA or the consumer court as soon as possible to avoid any limitation issues. Delaying could weaken your position.

Feel free to share the specific clauses from your agreement here — the wording can significantly impact your case.

📚 References

Builder demanding extra ₹3 lakh before handing over my flat in Pune?

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