Rera- do’s & dont’s on agreement possession dates
What can home buyers do, under RERA, if agreements don’t mention possession dates
There have been cases galore, where home buyers have faced delays in getting the possession of their flats. In many cases, the delays have been for more than five to six years. Some developers have even gone to the extent of not mentioning the date of possession in the agreement, leading to mental and financial trauma for the home buyers.
While taking a serious note of the issue, the Maharashtra Real Estate Regulatory Authority (MahaRERA), in a recent judgement, directed Skyline Construction Company to refund Rs 1.06 crores, along with an interest of 10.55 per cent to actor Vrajesh Hirjee, for failing to hand over possession and keeping the date of possession clause empty in the registered agreement. The Authority also asked the builder to refund tax deducted at source (TDS) and stamp duty paid by Hirjee. In another case, Aparna Singh, who had purchased a flat in a residential project in Thane, was not able to claim interest relief under Section 18 of the Real Estate (Regulation and Development) Act (RERA) rules, due to the absence of the possession date in the sale agreement. In her case, the RERA tribunal ordered the developer to pay interest to her, even though the date was not mentioned in the agreement.
What is possession date?
The possession date, in case of a home purchase agreement, is the date on which the unit’s possession is to be handed over to the buyer. This date should be clearly mentioned in the agreement and is well-defined under the RERA norms and rules. “The possession date, generally known as completion date, is usually a few months or years from the date of entering into or executing the agreement in favour of the flat purchaser. It is the date when the developer completes the construction work of the building and obtains the requisite permissions from the local body/authority, for permitting the flat purchasers to occupy the same. In other words, it is the date from which the buyer has the right to demand the possession of the flat from the developer,” explains Parth Mehta, managing director of Paradigm Realty.
Possession date: Important points for home buyers to consider
The home buyer should look for projects registered under RERA and the draft agreement on the website. This agreement should be checked by an advocate, to verify whether it conforms to the RERA. The buyer should also check the date of possession mentioned in the agreement and the ‘grace period’, if any. Ideally, six months should be the maximum grace period, from the date of possession specified in the agreement. As per the Maharashtra Ownership of Flats Act, 1963 (MOFA), the exact date of possession should be disclosed in the agreement of sale. Consequently, in its absence, in many cases, the deal was declared invalid. A specific clause in the agreement, known as the ‘compensation clause’ can also be included, wherein, in case of failure to finish a project within the date mentioned in the agreement, the developer will be bound to pay a stipulated amount to the buyer every month.
Having the possession date in writing, gives the buyers assurance that the developer will ensure timely delivery as per the agreement and that their investment is safe, maintains José Braganza, joint MD, B&F Ventures (P) Ltd.
As a first step, the buyer has to do a background check on the builder and physically inspects all documents, especially details about the possession date, before buying any property. The possession date, ideally, should be between two-three years from the inception of the project, regardless of its size,” he concludes.