In case of project delay, Mumbai Grahak Panchayat wants builders to directly pay interest to homebuyers
The Maharashtra Real Estate Regulatory Authority (MahaRERA), since its inception, has received maximum complaints about delayed possession from homebuyers. To overcome the quantum of cases, Mumbai Grahak Panchayat, has written to the authority asking them to lay down a rule that will benefit homebuyers.
The rule aims to force developers to directly pay interest to homebuyers in case of project delay. And to keep a tab on whether developers have made the payment or no to these affected homebuyers, they will be required to submit a compliance report quarterly. This will in turn reduce the number of cases reaching the regulatory authority.
The letter reads, "Most of the ongoing projects registered with MahaRERA are delayed for a period ranging from 1 year to even 6/7 years or even more. Huge amounts of hard earned money and even borrowed amounts of allottees are stuck with the promoters of such ongoing delayed projects. Giving the revised date of possession to MahaRERA while registering such projects does not absolve such promoters from their liability to pay interest to the allottees for the original delay."
The provision under section 18 (1) of the RERA act, requires promoters of such delayed projects to pay allottees interest on their amount paid at the SBI's Highest Marginal Cost of Lending Rates plus two per cent interest.
Advocate Shirish Deshpande, of MGP, said, "We do feel that the promoters on their own will not pay such interest to the allottees for every month of delay unless they are directed by MahaRERA. Hence, the authority should direct all the promoters of delayed projected to comply with the mandate of section 18 (1) and start paying interest. The promoter should also be directed to file compliance of the decision with MahaRERA in their quarterly updates."
The aim of this is that if such directions are issued then thousands of homebuyers will not have to file complaints seeking payment of such interest with MahaRERA. In the last one week, Runwal and Nirmal Lifestyle were asked to pay interest to the allottees for delayed projects.
The letter further states, "The intention of the Parliament in this scenario is that the allottees already suffering hardships due to delays should not be forced to approach the MahaRERA or any other court. In each such case and the interest payment to the allottees by the promoters is expected to be automatic as the promoters recover interest from the allottees in case of delay in payment of any instalment by just raising a demand letter."
...& ANALYSIS
- There are hundreds of projects that have been delayed by developers and thousands of homebuyers who continue to suffer.
- If a developer, doesn't hand over possession on time he is bound to pay interest to the homebuyer. But then, for that, the homebuyer has to approach MahaRERA.
- If this new rule is laid down and compliance report is submitted, then, homebuyers won't have to approach the court or MahaRERA.
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