Can a builder demand extra ₹5 lakh at possession delay in Hyderabad?

Question

I booked a flat in Hyderabad and was supposed to get possession last month. Now the builder is saying there are additional charges of ₹5 lakh due to unforeseen circumstances before they can hand over the flat. This wasn't mentioned in the contract, and I'm worried about being cheated. I have already paid 90% of the cost. Is the builder legally allowed to demand extra money at this stage, and what should I do to protect my rights?

Adv. Neha Joshi · Accepted Answer

Hi there! I understand your concern about the unexpected demand for extra payment from the builder. Let's break down the legal aspects under Indian law to see what your options are.

First, let's look at the contract you signed with the builder. The Real Estate (Regulation and Development) Act, 2016 (RERA, 2016) is crucial here. Under RERA, builders are required to adhere to the terms and conditions explicitly mentioned in the agreement for sale. Any additional charges not mentioned in the agreement would generally be considered unfair.

Section 13(2) of RERA states: "The promoter shall not accept a sum more than ten percent of the cost of the apartment, plot, or building as an advance without first entering into a written agreement for sale."

Additionally, if the possession is delayed, you may be entitled to compensation for the delay, rather than being liable for additional charges. The builder cannot unilaterally impose extra charges unless such a provision is clearly mentioned in the contract.

In the case of Fortune Infrastructure (Now Known As Hicon Infrastructure) & Anr. vs. Treasure Town & Ors. (2016), the Supreme Court emphasized that the builder must adhere to the terms of the agreement and cannot impose additional charges unilaterally.

Here’s what you can do to protect your rights:

Review Your Agreement: Check your sale agreement for any clauses that might allow the builder to charge extra under specific circumstances.
File a Complaint with RERA: If the demand is not justified, you can file a complaint with the RERA authority in Telangana. RERA is designed to protect homebuyers and address such grievances.
Seek Legal Advice: Since I am a junior advocate, I'd recommend consulting a senior advocate who specializes in property law for personalized advice.
Negotiate: If possible, try to negotiate with the builder. Sometimes, a direct conversation can resolve misunderstandings.

Remember, the builder cannot legally demand extra money outside the terms of the agreement without your consent. It's important to act promptly and assert your rights.

I hope this helps, and I wish you the best in resolving this matter!

📚 References:

Adv. Gaurav Singh · Answer

Hi there, I can understand how frustrating and stressful this situation must be for you. You've already invested a substantial amount, and now facing an unexpected demand can be quite unsettling.

Short answer: No, the builder cannot legally demand extra money if it wasn't specified in the original contract.

Under the Real Estate (Regulation and Development) Act, 2016 (RERA), builders are required to adhere strictly to the terms and conditions mentioned in the agreement. If the contract does not mention any additional charges, the builder cannot unilaterally impose them.

Here's what you can do next:

Review Your Agreement: Carefully go through your sale agreement to confirm if there is any clause that allows the builder to charge extra under specific circumstances.
Send a Formal Notice: Draft a letter to the builder, clearly stating that such charges are not part of the agreement and you do not consent to them. Send this by registered post and keep the receipt.
File a Complaint with RERA: Since your flat is in Hyderabad, you can file a complaint with the Telangana RERA authority. They are responsible for ensuring that builders comply with the RERA guidelines.
Approach the Consumer Forum: If the builder continues to insist on the additional payment, consider filing a complaint with the Consumer Disputes Redressal Commission. They handle cases involving unfair trade practices and deficiencies in service.

From my experience, builders sometimes try to pass off their financial burdens onto buyers, hoping they won't challenge it. Courts and forums often side with consumers if the demand is not contractually justified.

Time Limits: It's crucial to act promptly. Under RERA, complaints should ideally be filed within a reasonable time after the issue arises. Consumer complaints should be filed within two years from when the cause of action arises.

Feel free to share the specific clauses of your agreement here if you need further clarification. I'm here to help you navigate this situation effectively.

📚 References

Adv. Mohan Das · Answer

It seems you're in a difficult situation, but let's break it down to understand your rights and the builder's obligations under Indian law. Since you are dealing with a property issue in Hyderabad, the Real Estate (Regulation and Development) Act, 2016 might be applicable, as it governs real estate transactions and aims to protect home buyers. First, let's consider the legality of the builder's demand: Contractual Obligations: The primary document governing your transaction with the builder is the sale agreement. If the agreement does not mention any clause allowing the builder to demand additional charges due to unforeseen circumstances, then such a demand is likely unjustified. RERA Compliance: Under the Real Estate (Regulation and Development) Act, 2016, builders are required to adhere to the terms and conditions mentioned in the sale agreement. Any unilateral demand for extra charges without prior agreement could be considered a violation. Possession Delay: If the possession is delayed, the builder might actually be liable to compensate you, not the other way around. Section 18 of the RERA mandates that the builder must compensate the buyer for any delay in possession unless the delay is due to reasons beyond the builder's control. Here's what you can do to protect your rights: Review the Agreement: Examine your sale agreement thoroughly to ensure there is no clause that allows the builder to demand additional charges for unforeseen circumstances. Communicate in Writing:

Adv. Kavya Reddy · Answer

Hi there! I looked into this carefully and here's what I found. The situation you're facing is unfortunately not uncommon, and there are legal protections in place to help you. Let's break down the key points. First and foremost, the terms of your contract are crucial. If the contract does not mention any provision for additional charges due to "unforeseen circumstances," then the builder generally cannot demand extra money beyond what was agreed upon. You mentioned that this demand wasn't part of the original agreement, which strengthens your position. The Real Estate (Regulation and Development) Act, 2016 (RERA, 2016) is designed to protect homebuyers like you. Under Section 13 of RERA, a promoter cannot accept more than 10% of the cost of the apartment as an advance payment without first entering into a written agreement for sale. Moreover, any demands for additional payments must be in line with the terms agreed upon in the contract. In addition, Section 18 of RERA provides that if the builder fails to complete or give possession of the apartment as per the terms of the agreement, the buyer is entitled to a refund of the amount paid along with interest. This section essentially holds builders accountable for delays and protects buyers from arbitrary demands. There are actually a few important cases on this point. In the case of Fortune Infrastructure v. Treasure Town (2016), the Supreme Court held that builders must adhere strictly to the terms of the contract and cannot

Can a builder demand extra ₹5 lakh at possession delay in Hyderabad?

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