Recently, at Power to Consumer we have seen a rise in the number of complainants approaching us to file a case against a builder. Many of them have similar grievances such as delay in possession of their property, mute responses from the developer, unfinished projects due to litigation issues, absconding builders, poor quality construction so on and so forth.
We already covered the topic of compensation due to delay in handing over projects. We decided to write this post to make the general consumer aware of pitfalls in dealing with a builder, and how can they take the support of legal process to fight them back.
Builders are LIABLE under the Consumer Protection Act, 1986
As per a landmark decision passed in 1993 in the case of Lucknow Development Authority vs. M.K.Gupta, the Honourable Supreme Court of India passed a judgement 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:
[su_quote]”Delay in delivery of possession, non-completion of construction within the stipulated time, defective and faulty construction and more…”[/su_quote]The judgement 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.
A list of situations under which a property buyer can file a case:
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:
- Non-execution of relevant sale agreement despite having received a substantial advance amount
- 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
- Charged higher than the agreed amount
- No issuance of proper receipt(s) against the paid amount
- Poor quality construction
- Delivering of a house not complying to agreed specifications
- No free parking space within the premises
- Did not form a co-operative housing society and handed over to members
- Non-provision of water storage tank
- Non-provision of proper ventilation and light
- Delayed possession beyond the stipulated time limit
- Not obtaining completion certificate from the concerned registered (by the authorities) architect
- Non-issuance of Occupancy Certificate at the time of delivery of respective flats/house to its occupants
- Non-declaration of expenses against which the developer collected money
And many more…
Any project falling short of above listed causes can be referred to Power to Consumer prior to taking delivery of the property from the concerned builders so that we can take up the matter as a pre-litigation issue.
How to file a complaint against a builder in the Consumer Court?
With builders coming under the clause of being a service provider, the process of filing a consumer court complaint against them is the same as with other service providers. To file a complaint, you need to adhere to the following steps:
- Send a well drafted Legal Notice to the builder stating your reasons of discontent
- Await for a response for the stipulated time from the other party
- On no-response, prepare a petition stating facts and evidences with the help of expert legal advice
- Approach the Consumer Court and file your petition against the builder
But one big exception applies to filing the case in the event of delay in possession. There is no time limit to move the court against builders.
As per a judgement passed by the National Commission in the case of Jayantabhai Ranka and Arunaben Kapadia vs Ravi Developers, the Commission 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.
This means, no matter how much the delay, the builder is liable to properly honour his service agreement. The other important point that this particular case also highlighted is that ‘each property developer is liable to execute an agreement for sale’. And failure to do so can be a cause of action against the builder in the Consumer Court.
If you have been cheated by a builder, or someone you know has been a victim of the misdeeds of a property developer, you can get in touch with our learned Consumer Rights Adviser for support. Power to Consumer is here to support consumers like you in resolving issues and disputes of any kind and nature. If you need any support regarding the complaint filing process or want to file a complaint against the builder, please get in touch with us immediately.