Builder demanding extra 3 lakhs for registration, is this legal?

Question

I booked a flat in Bangalore last year and paid everything as per the agreement. Now the builder is demanding an extra ₹3 lakhs saying it's for 'new registration charges'. I'm supposed to get possession in two weeks, but he refuses to proceed without the payment. I'm worried because I can't afford this additional amount. What are my options? Is this even legal? Can I file a complaint against him under consumer protection laws?

Adv. Radha Krishnamurthy · Accepted Answer

When dealing with a situation where a builder is demanding additional charges not specified in the original agreement, it's important to understand your rights under Indian law, particularly under the Consumer Protection Act, 2019 and related real estate regulations.

First, you should review your agreement thoroughly to determine if there are any clauses that allow for such additional charges. If the agreement does not provide for these "new registration charges," then the builder's demand may be considered illegal and an unfair trade practice under the Consumer Protection Act, 2019.

Under the Real Estate (Regulation and Development) Act, 2016 (RERA), builders are required to adhere to the terms and conditions stipulated in the agreement, and any deviation, especially in financial terms, can be challenged. Karnataka has its own RERA rules, and you can file a complaint with the Karnataka RERA authority if the builder's demand is unjustified.

Here are your options:

Negotiate with the Builder: Communicate your inability to pay the additional amount and insist on adherence to the original agreement terms. Sometimes, a firm stance can lead to a resolution.
File a Complaint with RERA: You can file a complaint under the Real Estate (Regulation and Development) Act, 2016. The RERA authority can address grievances related to unfair practices by builders.
Approach the Consumer Forum: If the builder's actions constitute an unfair trade practice, you may file a complaint with the Consumer Forum. The Consumer Protection Act, 2019 provides for remedies against such practices.

In the case of DLF Limited v. Manmohan Lal (2010), the Supreme Court held that any additional charges not agreed upon in the initial agreement amounted to an unfair trade practice, thus setting a precedent for similar disputes.

It is crucial to act swiftly, especially since you are close to the possession date. Filing a complaint with RERA or the Consumer Forum can often result in a prompt resolution, but be aware of any specific limitation periods for filing complaints under these Acts.

If you need further assistance, it may be beneficial to consult with a lawyer specializing in real estate disputes in Karnataka to ensure your case is handled effectively.

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Adv. Neha Joshi · Answer

Hi there! I can understand how stressful this situation must be for you. Let's break down your options under Indian law and see what steps you can take. Firstly, it is crucial to refer to your sale agreement or builder-buyer agreement. Check if there is any clause that allows the builder to demand additional charges for registration. If the agreement specifies a fixed amount or does not mention additional charges, the builder's demand might be unreasonable. Under the Real Estate (Regulation and Development) Act, 2016 (RERA), builders are required to adhere to the terms of the agreement and cannot unilaterally impose additional charges. Ensure that your project is registered under RERA, as this will provide you with a stronger legal standing. If the builder is registered under RERA and is still demanding extra charges, you can file a complaint with the RERA authority in Karnataka. The RERA authority can direct the builder to comply with the terms of the agreement and refund any excess money collected. Additionally, you can file a complaint under the Consumer Protection Act, 2019. Builders fall under the purview of this Act as service providers, and demanding extra money without justification can be considered an unfair trade practice. You can approach the Consumer Disputes Redressal Commission for relief. There is a relevant case, Fortune Infrastructure v. Trevor D'Lima (2018), where the Supreme Court held that builders cannot demand additional charges that are not stipulated

Adv. Sudha Bhatt · Answer

It appears that you are facing an unexpected demand from the builder for an additional ₹3 lakhs under the guise of 'new registration charges.' Let's break down your options and legal standing under Indian law.

Initial Steps:

Review your Agreement for Sale: Check if there is any clause that allows the builder to demand additional charges beyond what was initially agreed upon. If there is no such provision, the demand may be unjustified.
Request a Breakdown of Charges: Ask the builder to provide a detailed explanation and justification for the additional charges. This will help clarify whether these charges are legitimate or arbitrary.

Legal Position:

If the demand for extra charges is not supported by your agreement, the builder's actions could be considered unfair trade practices under the Consumer Protection Act, 2019. You have the option to file a complaint with the Consumer Forum alleging unfair practices and seeking redressal.

The Supreme Court of India in the case of Fortune Infrastructure v. Trevor D'Lima (2014) held that builders cannot impose additional charges not agreed upon initially.

Filing a Complaint:

Consumer Forum: File a complaint in the Consumer Disputes Redressal Commission. You can claim a refund of the extra amount if paid, compensation for harassment, and any other relief deemed appropriate.
Real Estate Regulatory Authority (RERA): Since your property is in Bangalore, you can also approach the RERA, 2016. Builders are required to register projects under RERA, and any deviation from agreed terms can be challenged.

Timelines:

Consumer Complaints: Generally, the limitation period for filing a consumer complaint is two years from the date of the cause of action. However, it is advisable to act promptly.

Conclusion:

Given the seriousness of the situation and the looming possession date, I recommend acting swiftly. Document all communications with the builder and consider sending a legal notice to formally address the issue. If the builder continues to be uncooperative, proceed with filing a complaint under the Consumer Protection Act and/or RERA.

Each state may have specific rules, so consulting a local advocate could also provide additional insights tailored to your jurisdiction.

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Adv. Lakshmi Venkat · Answer

I understand how frustrating and stressful this situation must be for you, especially when you're so close to taking possession of your new home. Let's see what we can do about this. The short answer is: No, the builder cannot legally demand extra money beyond what was agreed upon in your contract unless there is a clear provision for such charges. This demand seems to be unfair and you likely have grounds to challenge it. Under the Consumer Protection Act, 2019, any unfair trade practice, such as demanding extra charges without prior agreement, can be challenged. The law protects consumers from such exploitation, and you can file a complaint against the builder for this unfair demand. Here's what you can do next: Review Your Agreement: Check the agreement you signed with the builder to see if it mentions any additional charges related to registration. If not, this demand is likely illegal. Send a Legal Notice: Draft a legal notice to the builder, stating that their demand for extra charges is not supported by the agreement and is therefore illegal. Mention that you are prepared to take legal action if necessary. File a Complaint: You can file a complaint with the District Consumer Forum. Since the amount involved is ₹3 lakhs, it falls within the jurisdiction of the District Forum, which handles cases up to ₹1 crore. Include all relevant documents, such as the agreement and any communication with the builder. RERA Complaint: Consider filing a complaint with the Real Estate Re

Builder demanding extra 3 lakhs for registration, is this legal?

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