SMART SOCHO: Haunted by endless project delays? Here's what you can do

With project completion delays now more the norm than the exception, home buyers need to be extra vigilant and be prepared to explore legal options to safeguard their interests and hard earned cash, writes Rajesh Kulkarni.

Kapil Sharma, a mid-level IT professional from Mumbai, vividly recalls that fateful day four years ago when he booked his dream home at a new residential project by a reputed developer in the city's suburbs.

Married just about a year ago to a fellow IT professional, booking a home was his first major milestone post his marriage with the possession scheduled for twenty months later. That day his face reflected his happiness and the smile said it all as he answered a barrage of congratulatory calls and messages from family and friends.

Perhaps the only thing that Kapil did not anticipate was the sudden slowdown in realty sales. With no cash coming in, many under-construction projects were left in the lurch, unfinished and forsaken as developers concentrated all their resources and efforts to push sales in ready-to-move-in apartments that were finding no takers.

It's been four years since, even as the realty property is showing no signs of a revival in the immediate future. Kapil's hope of moving into his new home with his wife and parents have been dashed, as his project remains unfinished, ostensibly for the lack of funds.

Kapil is just one of the many home buyers who have been left stranded by developers with a string of unfinished projects across the country. According to data collected by a leading research and analysis company scanning projects that had offered possession between 2011-2014 in the NCR belt a whopping 78 percent (669 of 856 projects) are way behind schedule, with an average delay of approx 30 months.

The MMR fares no better with an estimated 45 percent projects already beyond their completion date clocking an average delay of almost 20 months. With an average delay of about 47 percent and 27 percent, property buyers in Kolkata and Chennai are no less anxious faced with an average delay of 18 months and 14 months respectively.

Clearly property buyers today are faced with a near insurmountable situation. With projects getting delayed endlessly, buyers are forced to undergo unnecessary mental stress which when combined with the added pressure of EMIs taking a substantial part of their monthly earnings straight out of their pocket, makes the situation even more precarious.

So what are the options left with home buyers faced with such a complex quandary? The obvious answer would be to opt for legal recourse. However a majority of buyers are against being engaged with a moneyed builder in a long-drawn court case. While on the surface, this might seem perfectly justified, legal experts point to several cases in the recent past where buyers have won cases against errant developers.

For those buyers hesitant to file an individual case, the law permits property buyers to file a case in a group or jointly against such builders under Section 12(1) (c) of the Consumer Protection Act, 1986.

However according to legal experts, stranded buyers who decide to file a case jointly need to ensure that they are in sync in terms of the developer in and project in question, the payment plans opted for, cause of action and other key details so as to allow the court / consumer forum to make a ruling based on a single petition.

There are other advantages in filing a case as a group. For starters, the cost of litigation which can be quite expensive comes down substantially since it's shared among all members of the group.

Also the chances of undue harassment and other criminal acts by concerned parties is also reduced since intimidating a group is far more difficult than a lone individual. Moreover an aggrieved group of individuals has a higher chance of making a strong impact in court as compared to a single victim.

As with any legal dispute, buyers need to ensure that they are in possession of all the relevant hard evidence that substantiates their allegations prior to approaching the court.

Typically this will include all the property papers and documentary evidence like the project brochures, payment receipts, correspondence with the developer, signed property agreement, copies of emails exchanged, photographic evidence (if any) and so on.

An important point to be noted here is that a buyer needs to have discussed the problem/ objections with the said builder before opting for legal action. Further they need to produce the evidence as outline above that clearly points out the alleged violations or unfair demands to prove their case and the validity of their allegations against the builder.

One of the most common mistakes committed by victims of property disputes is of waiting too long before taking remedial action. Property buyers need to be extra vigilant on this front and need to initiate action if the developer does not handover possession by the scheduled date.

It's a process which begins by making a site visit and assessing if the delay is likely to be temporary or indefinite. If it's the later, any delay in filing an official complaint would only serve to weaken your claim against the developer.

Aggrieved property buyers need to remember that there is a stipulated timeframe during which a case can be filed. For example, a consumer court will not entertain a complaint after a period of two years from the date of cause of action.  However, since the dispute pertains to real estate and a continuous cause, this two-year limitation may not be enforced strictly.

Moreover, an unexpected delay in project completion is not the only reason a property buyer can approach the court or consumer forum for justice. Related issues like any deviation from the original designs, misuse or shortfall of common amenities, sudden reduction or changes in the apartment area or price, are all potential areas where a well-informed buyer can approach a relevant legal forum that may include the consumer court, civil/ criminal court or the Competition Commission of India (CCI) for solutions to their realty-related issues.

With the real estate industry facing strong turbulence owing to dwindling sales, a rising pile of unsold inventory and a crushing debt burden, completion delays ranging from about six months to a year have now unfortunately become a common phenomenon among industry players.

However in light of the situation, buyers now need to exercise extra caution and if faced with delays that extend beyond a reasonable limit, be prepared to exercise their legal options to safeguard their rights and hard-earned monies as provided for by the law of the land.