Status as on: 23/02/21

The injustice and cruelty committed by the builders against the innocent homebuyers is not unknown to anybody now and that is the reason the judiciary has come up with stringent actions against the Builders for the same. Recently, the Learned Tamil Nadu Real EstateRegulatory Authority [hereinafter referred to as “TNRERA”] passed an order against the builder who refused to provide the valid documents to the homebuyer, directing the builder to refund the principal amount so paid by the homebuyer along with the interest and compensation & litigation expenses.

Case Facts:

The buyer in the instant matter has purchased a plot form the builder, VGN Property Developers Pvt. Ltd. by paying a price of Rs.5,36,000/- [Rupees five lakhs thirty six thousand only], which was  5% of the total sale price consideration. However, after reviewing the document furnished by the builder, the homebuyer found out that the documents were insufficient to determine the clear title of the plot/project. And thus requested the builder to provide copies of the asset sale committee’s order and other documents which were required to establish the property’s clear title.

The buyer in the instant matter has purchased a plot form the builder, VGN Property Developers Pvt. Ltd. by paying a price of Rs.5,36,000/- [Rupees five lakhs thirty six thousand only], which was  5% of the total sale price consideration. However, after reviewing the document furnished by the builder, the homebuyer found out that the documents were insufficient to determine the clear title of the plot/project. And thus requested the builder to provide copies of the asset sale committee’s order and other documents which were required to establish the property’s clear title.

The homebuyer contacted the builder several times in order to obtain the documents. When the builder’s officials met in person, they stated that they did not have those papers. As a result, the homebuyer demanded a refund of the advance payment, as paid till date; which was refuted by the builder. Aggrieved by this, the homebuyer approached the Learned TNRERA and filed a complaint against the builder under Section 31 read with Section 18 of the Real Estate (Regulation & Development) Act, 2016. The case was argued at length before the Ld. TNRERA.

The builder claimed that the homebuyer was not an allottee in the project as had signed only the application form, which stated explicitly that any claim for a refund of the booking advance would be denied. It was further submitted thatas per the cancellation clause in the booking form, the complainant is entitled to a refund after deducting five per cent of the unit cost. However, as the complainant paid only five per cent, he is not entitled for a refund of the same.

Judgment:

The Learned RERA Authority, after hearing both sides, concluded that the promoter’s duty to pass on clear and marketable title is undisputed, and that the seller of the property cannot impose terms on the complainant to the buyer because the documents are not required for the purchase of the property. “The Forum cannot delve into the question as to whether those documents are necessary or not for purchasing the property based on the legal opinion. But it is obvious that no purchaser can be compelled to purchase any property without subjective satisfaction as to clear and marketable title of the property…”observed the Authority.

In consideration of the same, the Ld. TNRERA directed the builder to refund the amount was paid by the homebuyer till date with interest along with a compensation to the tune of Rs.75,000/- [Rupees seventy five thousand only] as compensation and litigation expenses.

CONCLUSION

As a matter of indisputable right, the homebuyers have access to every document which is in custody of the builder which is subject to the satisfaction of the homebuyer before purchasing any property. In case, any homebuyer is facing an issue where the builder is not showing the documents to prove a clear title for the project land, they can approach the Ld. RERA for their redressal of their grievances.

Disclaimer – The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinion before relying upon the article. For more information, please contact us at rera@centrik.in