Saturday, 20 August 2016

Failure to give possession - Builder ordered to refund flat money with interest

District Consumer Forum in Mumbai has observed that a builder has to pay interest as well when  refunding the money received from a buyer whose flat could not be constructed.  The builder was directed a to pay Rs.2.5 lakhs to a mother –daughter who had booked a flat in lower parel but who never got possession of it.
The forum said “the opponents (construction company) utilized the amount of the complainants for more than three years ,therefore they are liable to pay interest, going by the provisions of the Maharashtra Ownership Of flats Act,”
The complainants’ Shaila and Puja Karambhelkar of Borivli had booked the 560sq-flat to be built by Rupji Constructions for  Rs.23.80 lakhs in November 2005. The builder had collected Rs.6.1 lakhs from the buyers in three years, but there was no construction.
In January 2009, the Karmbhelkars decided to withdraw the booking and sought refund with interest from the builder. The company returned the money it had collected between May 2009 and February 2009. Though the company had promised to pay the interest, it failed to do so despite several reminders from the buyers.
The Karambhelkars lodged a complaint in the CentralDistrict Consumer Disputes Redressal Forum in 2011. The company argued that they are not liable to pay interest as the Karambhelkars has cancelled the booking.
The forum held that the company was guilty of unfair trade practice.
 Projects on One Acre Land, 20% reservation for EWS
The Maharashtra Government has notified that in projects on one acre or above land 20% has to be reserved for Economically Weaker Section (EWS) of society. The Maharashtra chapter of CREDAI has welcomed the government resolution and is of the opinion that more clarity is required in this matter.
The state government has come up with an affordable housing policy. Mr. Sanjay Banait, under secretary, urban development department  had issued the notification on November 8. As per this notification every builder having construction on a land area of one acre or above will have to reserve  20% of the flats of the new construction for economically weaker section and low income groups. This modification is applicable to cities like Mumbai, Pune, Thane, Navi Mumbai, Nasik and Nagpur i.e., to the cities with population of over 10 lakhs.
This 20% reservation would be inclusive of both the flats and plotting schemes and builders floor space index (FSI) would not be included. The area of this single built flat should compulsorily range between 300-500 sq.ft.  On project completion 20% flats should be handed over to the Maharashtra Housing and Area Development Authority (MHADA) at the prevailing market rate of the construction cost. These flats would be allotted on the basis of special lottery method by the MHADA. It has been made mandatory for the MHADA to take possession of these flats within six months. In case of failure to take possession by the MHADA, then the builders can put the flats on sale but at the rate of MHADA (construction cost).
Mr.Anant Rajegaon, president of Maharashtra chapter of Credai has welcomed the decision of the government for increasing the land limit to one acre, making it applicable to cities with population of 10 lakhs and above. He has further said that exemption of cities with less than 10 lakhs population is a good move as there is little demand for small flats is low and if made applicable in future as proposed, would result in piling up of inventories.
Credai Vice President, Maharashtra has said, has said the move of the government is a good one as it will provide housing facility to the economically weaker sections at a low cost and cut down slums in the city. The difficulty is in its application for plotting schemes. He has further said that allowing 6 months time to MHADA to buy these 20%  flats on completion of the project would  block the investments and would increase in expense at the builders end. Tthis in turn affect the rates of the flats. He has suggested that the allotment at the construction stage itself will prevent such issues. He has also said that redevelopment projects must be excluded from the purview of this notification and Credai would take up the matter with the chief minister.
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