MahaRERA allows 6 Months Possession Delay in Case of GST

News - January 2017

In case the possession of a flat is delayed and the builder cites GST, demonetisation or approvals not coming in time as the reason, then a maximum delay of six months may be acceptable however beyond that timeframe, the developer will be liable to pay interest to homebuyers, stated the Maharashtra Real Estate Regulatory Authority (MahaRERA) while hearing a case against a builder who was dragged to the Authority for delaying the possession of an apartment to a homebuyer for almost a year.

Six homebuyers approached MahaRERA against Sea Princess Realty, that is developing a project called Gundecha Trillium in Borivali. The sale agreements were executed between October 2013 and February 2014. As per the agreement, the developer was supposed to give the possession of the flats by December 31, 2016. The developer had even collected up to 91 per cent of the consideration amount.

The advocate representing the developer claimed that specific clauses from the agreement, that entitle the developer to a reasonable extension in possession in the case of events beyond the developer's control, should be considered. On being asked for specific reasons by the Authority, the advocate stated demonetisation, implementation of GST and delay in receiving approvals from concerned authorities as the primary reasons for delay of possession.

MahaRERA held that the reasons given were general in nature. The order by Gautam Chaterjee, chairman, MahaRERA reads, "On the basis of the arguments made by the advocate of the developer, a maximum period of six months delay may be allowed to be condoned but certainly a delay of more than six months is attributable to the developer for which he is liable to pay interest on delay."

Chaterjee then ordered the developer to pay interest at the rate of 10 per cent to the complainants, for a period of six months on the total consideration paid by them to the developer prior to December 2016. He further asked the complainants to take possession of the said apartments within 30 days from the date of the order (January 16) since the occupancy certificate for the building is ready.