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MahaRERA urged to ask builders pay interest to home buyers for delayed projects

With the volume of complaints by harried home buyers for delay in possession of their flats rising every day, consumer rights organisation, Mumbai Grahak Panchayat (MGP), has urged the Maharashtra Real Estate Regulatory Authority (MahaRERA) to issue a directive to all developers to pay interest to home buyers as an automatic arrangement for delayed period of possession.

In a letter addressed to MahaRERA chairperson Gautam Chatterjee dated October 12, MGP chairperson and consumer activist Adv Shirish Deshpande said “The crystal clear provision under section 18 (1) requires that the promoters of such delayed projects should, on their own, pay the allottees interest on their amounts paid, at the prescribed rate for every month of delay.”

Deshpande said when RERA was passed, the intent of Parliament was that the allottees, already suffering hardships due to delays, should not be forced to approach MahaRERA or any other court in each such case.

“The interest payment to the allottees by the promoters is, therefore, expected to be as automatic as the promoters recover interest from the allottees in case of delay in payment of any instalment by just raising a demand letter,” Deshpande said in his letter.

Since the promoters, on their own, will not pay such interest to the allottees for every month of delay, Deshpande urged MahaRERA to issue a blanket directive to all developers who had delayed possession issues.

“You will appreciate that to protect the interests and the rights of the allottees, the MahaRERA shall be fully justified in directing all the promoters of the delayed projects to comply with the mandate of Section 18 (1) proviso and start paying interest to the allottees affected by the delayed projects. The Promoters may be further directed by MahaRERA to file compliance of this direction with MahaRERA in their quarterly updates,” Deshpande said in the letter, echoing the demand by most home buyers.

Deshpande pointed out that most of the on-going projects registered with MahaRERA were delayed for a period ranging from one to seven years or more.

“Huge amounts of hardearned money of allottees is stuck with the promoters of such ongoing delayed projects. Giving revised date of possession to MahaRERA while registering such projects does not in any way absolve such promoters from their liability to pay interest to the allottees for the original delay,” Deshpande said in the letter.

Speaking to Mumbai Mirror on Wednesday, Deshpande said “For example, a home buyer invested in a flat in 2014 and the developer promised possession by December 2014. When the developer registered the project in July this year, he put a revised possession date of July 2018. But this doesn’t absolve him of the delay. He is liable to pay interest on a monthly basis for the delayed possession under RERA provisions. So, why not make the developer pay the interest automatically instead of going through the process of receiving complaints from home buyers and then adjudicating such cases.”

MahaRERA authorities are likely to discuss the MGP demand on Thursday and take a decision.


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