Delay In Handing Over Possession, Rajasthan RERA Adjudicating Officer Orders Compensation of ₹1 Lakh To Homebuyer For Financial Loss

Background Facts

The homebuyer (Complainant) booked a flat in the builder's (Respondent) project named "Capital Greens," located in Bhiwadi, Rajasthan. The total cost of the flat was Rs. 37,28,750. The homebuyer initially paid Rs. 3,00,000 and later paid an additional Rs. 18,00,000, totaling Rs. 21,00,000.

An agreement for sale was executed between the builder and the homebuyer on April 23, 2014, which stipulated that the builder was required to deliver possession of the flat within 4 years, with an additional 6-month grace period.

The homebuyer contended that the builder failed to deliver possession of the flat within the agreed timeframe. The builder had also agreed via email on April 17, 2014, to pay a penalty of Rs. 10 per square foot for each month of delay. Due to this delay, the homebuyer had to live in alternative accommodation.

Additionally, the homebuyer had booked a retail shop in another project by the same builder. The builder was supposed to pay rent for this shop but failed to do so. Consequently, the homebuyer filed a complaint before the authority, seeking compensation for mental distress, financial losses, and legal costs.

Observation and Direction by Authority

The authority observed that, according to the law, the builder must deliver possession as per the agreement. If they fail, the homebuyer has the right to get a refund with interest or receive interest for each month of delay, regardless of any extensions or issues in obtaining completion or occupancy certificates.

The authority held that homebuyers are entitled to compensation for only six months because they did not mention issues with amenities or the lift in their complaint, making it impossible for the builder to address these claims

Further, authority noted that the builder held Rs. 18 lakh of the homebuyer's money for six months. Given the current market rate of return of 12%, the homebuyer is entitled to compensation of Rs. 1 lakh for financial losses incurred.

The authority further held that the homebuyers cannot receive compensation for alternative accommodation or interest on the deposited amount because they are receiving possession. Granting both compensation and additional interest or rent would result in dual benefits for the homebuyers and an unfair financial burden on the builder.

However, authority acknowledged that the homebuyers suffered physical and mental distress and incurred litigation costs through no fault of their own. Therefore, they are entitled to a lump sum compensation of Rs. 50,000.

Case – Mr. Randhir Brar & anr Versus M/s R-Tech Housing Pvt. Ltd.

Citation - Complaint No.RAJ-RERA-C-2022-5273