Action against Builder for Delayed Possession

  • Watch Advocate Jaspreet Singh Rai talk about the procedure to file a case against the builder for delayed possession or any other dispute where the builder has not complied with the terms agreed in the builder buyer agreement.

    Due to a landmark judgment passed in 1993 in the famous case of the Lucknow Development Authority v/s M.K.Gupta, the Hony’ Supreme Court of India passed a judgment stating that “all builders/contractor(s)/all concerned authorities of any State engaged in Housing Construction activity in any manner are amenable to Consumer Protection Act, 1986 for any act or omission relating to housing activity such as: “Delay in delivery of possession, non-completion of construction within the stipulated time, defective and faulty construction and more…”

    The judgment clearly states the fact that a builder who constructs a house or hires the services of a contractor to develop a property is engaged in the act of providing service to his customer, and for which he is getting monetarily compensated. This makes him a service provider and hence liable under the clauses of Consumer Protection Act, 1986.

    The International Consumer Rights Protection Council has listed down the following grounds in which a property buyer can drag an incompetent property developer to the Consumer Court.

    A property buyer can file a case in the following scenarios:

    a. Non-execution of relevant sale agreement despite having received a substantial advance amount

    b. Non-issuance of copies of all relevant documents viz.; development agreement, power of attorney, sanctioned plan (by concerned Regional Authorities), specification of construction materials/design as per sanctioned plan and any other relevant documents

    c. Charged higher than the agreed amount

    d. No issuance of proper receipt(s) against the paid amount

    e. Poor quality construction

    f. Delivering of a house not complying to agreed specifications

    g. No free parking space within the premises

    h. Did not form a co-operative housing society and handed over to members

    i. Non-provision of water storage tank

    j. Non-provision of proper ventilation and light

    k. Delayed possession beyond the stipulated time limit

    l. Not obtaining completion certificate from the concerned registered (by the authorities) architect

    m. Non-issuance of Occupancy Certificate at the time of delivery of respective flats/house to its occupants

    n. Non-declaration of expenses against which the developer collected money

    Any project falling short of above listed causes are liable and eligible to be taken an action against.

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    How to file a complaint against a builder in the Consumer Court?

    A builder being called as a service provider, the process of filing a consumer court complaint against them is the same as with other service providers.
    Below mentioned are the steps to file a consumer complaint against a builder:

    1. Send a well drafted Legal Notice to the builder stating your reasons of discontent

    2. Await for a response for the stipulated time from the other party

    3. On no-response, prepare a petition stating facts and evidences with the help of expert legal advice.

    4. Approach the Consumer Court and file your petition against the builder

    5. In the event of a delay in possession by a builder, there is no time constraint that the buyer has to follow to file the complaint.

    National Commission On Builder Delaying Possession

    The National Commission in a judgment pointed out that “the cause of action on the builder continues till the allotment of the site or full refund of money on refusal to allot” which means that to honor his service agreement, irrespective of how much delay, the builder has to abide and complete the task on time. Yet another fact pointed by the commission was that “each property developer is liable to execute an agreement for sale and a failure to do so can be a cause of action against the builder in the Consumer Court”.

    You may also read the latest news where the National Commission (NCDRC) has recently awarded exemplary relief to buyers in distress:

    65 Lakhs plus 18% interest to be paid by Unitech as compensation

    Jaypee Group fined 12% annual penalty in Noida project

    NCDRC makes Mumbai realtor group pay for sneaky actions

    Good news for home buyers as Real Estate Bill comes into effect from today

    Unitech MD's to pay 53 lakh as compensation or face jail time

    Developer asked to refund full amount to buyer and pay fine after plot not delivered on time


    Send a legal notice for faulty product or service

    Know More

    These guides are not legal advice, nor a substitute for a lawyer

    These articles are provided freely as general guides. While we do our best to make sure these guides are helpful, we do not give any guarantee that they are accurate or appropriate to your situation, or take any responsibility for any loss their use might cause you. Do not rely on information provided here without seeking experienced legal advice first. If in doubt, please always consult a lawyer.

  • See the video below to know more about this Consumer Court legal issue

Advocate Jaspreet Singh Rai

  Greater Kailash 1, Delhi

 Experience: 15 years

195 ratings
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