Builder demanding extra ₹5 lakh for delayed possession, what can I do?

Question

I bought a flat in Pune and the builder is delaying possession by over 6 months now. He’s now asking for an additional ₹5 lakh claiming increased costs for materials, or he won’t hand over the property. This demand came out of nowhere, and I feel trapped as I've already paid 90% of the amount. I am extremely frustrated and worried about losing both money and the flat. What are my legal rights in this situation? Can I challenge this demand in court?

Adv. Kavitha Menon · Accepted Answer

I'm sorry to hear about the stress this situation is causing you. It sounds incredibly frustrating, especially after having already invested so much into your new home. The short answer is: Yes, you can challenge this additional demand legally. The builder's demand for extra payment due to a delay is not typically enforceable unless explicitly stated in your agreement. Under the Real Estate (Regulation and Development) Act, 2016, builders are required to adhere to the terms outlined in the sale agreement. If the agreement does not mention any clause about increasing the cost due to material price hikes, the builder cannot arbitrarily demand additional money. Furthermore, the delay itself might entitle you to compensation, not the other way around. Here's what you can do next: Review your sale agreement: Check if there is any clause related to cost escalation or compensation for delays. Document everything: Keep a record of all communications with the builder, including this demand for additional payment. File a complaint with RERA: Since your property is in Pune, you can file a complaint with the Maharashtra RERA Authority. They are equipped to handle such disputes and can provide relief. Consider legal notice: If the builder remains uncooperative, you may send a legal notice through a lawyer, citing the breach of contract and demanding possession or compensation for delay. Initiate legal action: As a last resort, you may file a case in the consumer court or the civil court for breach of contract and unfair trade practice. In a similar case, Fortune Infrastructure vs. Treasure Town (2017 SC), the Supreme Court ruled in favor of the buyer, reinforcing that builders cannot impose additional charges without a clear contractual basis. Be mindful of the limitation period for filing a complaint, which is typically two years from when the cause of action arises. Missing this can weaken your case. I hope this helps you take the right steps forward. Feel free to share more d

Adv. Radha Krishnamurthy · Answer

I'm sorry to hear about your predicament. You have several legal remedies available to you under Indian law to address the builder's demand and the delay in possession. 1. Review the Builder-Buyer Agreement: The first step is to carefully review the terms of your builder-buyer agreement. It should specify the possession date and any clauses related to delay. Most agreements include a penalty clause for delays caused by the builder. If such a clause exists, you may be entitled to compensation rather than additional payments. 2. RERA Complaint: Since your property is in Pune, Maharashtra, it falls under the jurisdiction of the Real Estate (Regulation and Development) Act, 2016 (RERA). You can file a complaint with the Maharashtra Real Estate Regulatory Authority (MahaRERA). RERA mandates builders to adhere to the possession timelines, and any deviation can attract penalties. Under Section 18 of RERA, if the builder fails to complete the project or is unable to give possession in accordance with the terms of the agreement, you are entitled to a refund along with interest. 3. Consumer Court: You can also file a complaint in the consumer forum under the Consumer Protection Act, 2019. The builder’s demand for additional money and delay in possession can be considered as a deficiency in service. The consumer forum can order the builder to either hand over possession without the additional demand or provide compensation for the delay. 4. Legal Notice: Before proceeding to court, it m

Adv. Manish Tiwari · Answer

Before you proceed, there are three things I want you to be aware of. First, the obvious risk here is that the builder is making an additional demand that was not part of your original agreement. According to the Real Estate (Regulation and Development) Act, 2016 (RERA, 2016), any demand for additional payment must be in accordance with the terms of the agreement for sale. The builder cannot arbitrarily increase the price unless there is a clear clause allowing such an increase. Second, the non-obvious risk is related to the delay in possession. Under Section 18 of RERA, if the builder fails to complete or hand over the property by the date specified in the agreement, you are entitled to seek a refund of the amount paid along with interest. Alternatively, you can choose to continue with the project and claim compensation for the delay. Third, you should be aware of the potential for this situation to escalate if not handled properly. The builder's demand for additional payment could indicate financial instability, which might affect the completion of the project. Given these risks, here's how to protect yourself: 1. **Review Your Agreement**: Carefully review the agreement for sale to see if there is any clause that allows the builder to demand additional amounts. If there is no such clause, the demand is likely unjustified. 2. **File a Complaint with RERA**: You can file a complaint with the Maharashtra Real Estate Regulatory Authority. RERA has the authority to adjudicate o

Adv. Rajesh Agarwal · Answer

In situations like yours, the law is quite clear about the rights of flat buyers and the obligations of builders. Let me break down your legal position and the steps you can take. 1. Review the Builder-Buyer Agreement: The first step is to meticulously review the builder-buyer agreement you signed. This document should specify the possession date and any clauses related to delay or additional charges. Builders often include clauses to cover unforeseen costs, but such clauses must be reasonable and not arbitrary. 2. RERA Compliance: Given that your property is in Pune, the builder is likely registered under the Real Estate (Regulation and Development) Act, 2016 (RERA). Under RERA, builders are obligated to adhere to the possession date specified in the agreement. If they fail, they must compensate the buyer, not demand extra money. As per Section 18 of the RERA, if the builder fails to complete or is unable to give possession of the property in accordance with the terms of the agreement for sale, they must refund the amount with interest or compensate the buyer for the delay. 3. Legal Remedies: File a Complaint with RERA: You can file a complaint with the Maharashtra RERA authority. RERA authorities have been proactive in addressing such grievances. Consumer Court: You can also approach the Consumer Dispute Redressal Commission. Builders demanding extra money for possession delays can be considered an unfair trade practice under the Consumer Protection Act, 2019. Injunction Su

Builder demanding extra ₹5 lakh for delayed possession, what can I do?

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