Big relief for homebuyers - The Supreme Court has restored the sanctity of the builder-buyer agreement

The Supreme Court provided a big relief to thousands of homebuyers and in its latest action restored the sanctity of the builder-buyer agreement. The apex court said, "It is relevant to note that even for Section 18 (of RERA) the period has to be reckoned [with] in terms of the agreement and not the registration." Surfaces Reporter (SR) has all the exclusive details, read on.

Abhay Upadhyay, president, Forum For People's Collective Efforts and member, Central Advisory Council, RERA, MoHUA said, "It is good that the apex court has clarified the matter and hopefully it has now been settled once and for all. RERA authorities should now order payment of compensation from as per the builder buyer agreement, the sanctity of which has been upheld through this order."

Despite the enactment of Real Estate (Regulation and Development) Act, 2016, RERA barred remedies for homebuyer under the Consumer Protection Act. Earlier the court rejected the argument and made it clear that buyers can still approach the consumer forum for redressal, including refund and compensation from real estate firms, for the delay in handing over possession of their homes.

Legal experts welcomed the decision, said, "What this order means is that if a residential project’s RERA registration expires later than the handover date promised by the builder under the builder-buyer agreement, it does not mean that buyer’s entitlement to raise claim or cause of action gets deferred."

Vaibhav Suri, Partner, L&L Partners said, "A buyer is well within his right to enforce the handover date stipulated in the builder-buyer agreement. Section 18(a) of RERA (which provides for builder’s liability to refund in case of handover delay) uses the words “following the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein” which also signifies that handover date is to be reckoned as the one stipulated in the builder buyer agreement."

"Since the period of 42 months has expired well before the project was registered under the provisions of RERA Act, and merely because the RERA registration is valid until December 2020 does not mean that the entitlement of home buyers stands deferred," said M Arun Kumar, Partner, IndusLaw.


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