Home Buyers Proactive, Protest About Project Delays

By | May 11, 2016

Home Buyers Protest

Most people choose a big builder when buying a home, so that they have the best of everything. But unfortunately, in India, even this might not do the trick. Even in the case of branded homes, you might be forced to put up with certain irregularities such as project delays and plan deviations. Earlier, you may have kept quiet because no one was protesting. Now you can take the bold step of filing a case against the builder, just like several others have done in the recent past. And don’t think that it will drag on – the National Consumer Disputes Redressal Commission (NCDRC) seems to be dispensing justice pretty quickly.

Home Buyers Demand Justice

News reports state that recently, the NCDRC has asked the Jaypee Group, a huge conglomerate, to pay 12% interest for delaying its project named Kalypso Court located in Noida. It has also insisted that the builder complete the project by 21st July 2016. If they fail to do this, the Jaypee Group will need to pay Rs. 5,000 per day as penalty for every home. This will need to be paid till the home is handed over. The Commission has also instructed the builder to provide sufficient parking spaces for all homes and any excess fee collected in this regard will have to be refunded, along with an interest rate of 12% per annum.

Now who filed this case? This was filed by just 10 home buyers of this project, who formed an association named Developers Township Property Owners Welfare Society. There is a similar case against Lodha Group where a senior couple filed a case against the builder. In this case, the builder had cancelled the flat booked by the couple despite the buyers paying the developer in full. They had apparently demanded extra money for car parking, which was part of the agreement. Last year, Unitech was asked to pay 12% penalty for its project in Gurgaon after home buyers filed a case against the builder.

However, experts say that the project delays might be due to delay in approvals. “Most of the extensively reported incidents of delayed project completion are often not the result of malpractice, but of a flawed regulatory environment. It is true that some unscrupulous smaller developers intentionally undertake a slower pace of construction if sales in the project are sluggish or a larger part of the project is unsold. However, in most of the cases being touted as evidence of a corrupt industry, delays have happened because the authorities have not granted timely approvals and the morass of bureaucratic red tape that developers have to navigate for every project. Before a project is officially launched on the market and offered to buyers, there are myriad permissions that a developer needs to obtain from the state and central agencies and ministries. This does not only lead to delays, but also cost escalations.” says Anuj Puri, Chairman & Country Head, JLL India, a firm providing property consultancy.

Wake Up To Your Rights

Earlier, people used to fear the nexus between builders, brokers and bankers and refrained from filing cases. Now, people seem to be understanding that projects don’t move unless you take things to the next level. However, you need to understand your rights before you take the plunge.

Your rights as a home buyer (under the new Real Estate Bill)

Your Rights What they mean
All clearances to be completed before project launch.


No more pre-launch discounts. These are usually given because there are minimal approvals in place before the launch.
Get the actual carpet area of your home. Goodbye to Super Built Up Area! Builders have to give you the actual size of your home.


Timely completion of your home.


No completion delays. Builders need to stick to the timelines that they state when they sell the home.
Timely handover of your home.


Quicker possession. Builders have to give you the possession to your home as soon as they complete the project.
Provision for amenities that are part of the project (as advertised)


Get what was promised. Builders can no longer advertise amenities and later say that they are not available.


You Can Avoid This!

Ideally, you want to avoid situations like these and this is possible. You just need to follow some of these steps before choosing a project, as well as after zeroing in on a home.

  • Check for compensations on delay – Typically, builders make the sale agreement in such a way that in case of a delay on your part, you would need to pay a huge penalty. And if the delay is from their side, either the compensation is small or there is no compensation. You can judge the builder’s intentions by checking the rules regarding this.
  • Not taking a loan? Get legal advice – Usually banks do their own due diligence on the property before issuing loans. So, you can be assured to a certain extent that there will be no legal issues with the property. If you are not taking a loan, it is best to get a lawyer to check for encumbrances and ownership chains to ensure that the property is indeed ‘all clear’.
  • Look at the indemnity clause – There are cases where legal issues might arise despite you being careful. This is why you need an indemnity clause. This will protect you in case there are any legal issues with the project.
  • Form an association along with other buyers – As soon as you buy a home, form an association with other buyers. Typically, people tend to come over to look at their home during weekends. Exchange contact details and form a group so that you can protest against any deviations caused by the builder. Your sale agreement should include a clause where the builder is required to transfer all the deposits made to Government organizations for utilities such as electricity and water. A sinking fund also needs to be transferred to the owners’ association as soon as the project is handed over.

You can follow the same due diligence before you choose a Home Loan. Always compare interest rates and other charges before finalizing on a loan. You can save significantly on the costs for your home.

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