“Home Is Where The Heart Belongs.” Yes…there’s no place like home. But, can you call your rented apartment home? Certainly not…You need to have your own apartment, to call home.
Now, apartments in cities and metros, don’t come cheap. They cost lakhs or even crores of rupees. You can’t buy an apartment again and again. Your apartment would in all probability, be the first and last you buy.Should you blindly trust your hard earned money to a builder, who could just be making false promises? Is it not your duty to check what the builder is doing with your money? There are several cases in India, where the builders have taken money and buyers are still waiting for possession of their apartments.
You must have read in the newspapers, how municipal authorities are demolishing apartments and houses, which have encroached lake beds and storm drains, especially in Bengaluru. The reason…these buildings were constructed by the builders, without the necessary permits from the authorities. Many of these builders are now absconding. In this article you will learn, what to do if your home is demolished as an illegal construction and the builder does not care about your problem.
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SEE ALSO: Real Estate In India
Yes…you are in a difficult situation. But take heart…all is not lost. The builder has cheated you and must be punished for it. The builder has sold you the plot/property, without the proper approval of the layout plans by the appropriate authorities. This is called deficiency in service.
Now, you can file a complaint against the builder under the Consumer Protection Act, 1986. You file a complaint against the builder for deficiency in service. The purpose of the consumer protection act... To protect you against malpractices committed by the builder. You need to file a complaint within 2 years of the date of the dispute.
What do you gain from filing a complaint against the builder? You get a refund of the entire amount you have paid with reasonable interest. The builder cannot refuse to pay you interest, if it is found he has committed a deficiency in service. If the builder has made a false promise, you can even file a criminal case against him in the criminal court, along with the complaint you have filed in the consumer forum.
The builder has taken more than the promised time, to deliver the apartment and you suffer a financial loss. The main reasons for this….There could be a delay in getting the raw material for the construction of the building, or there is a shortage of people, needed for the construction of the building. The Government approvals needed, might also be taking time. This is not your problem….It’s the builders….Now, you have availed a home loan to purchase the under construction apartment and have to pay the pre-EMI’s, as well as rent on the apartment you are currently staying, till you get possession of your new apartment.
You must be wondering what is pre-EMI? If you avail a home loan to purchase an under-construction apartment, the bank sends money to the builder, only after each stage of the construction is completed. The bank charges you interest only on this disbursed amount, called pre-EMI. If you do not get possession of your home, within 5 years from the end of the financial year in which you availed the home loan, you will get a tax deduction of only INR 30,000 on the EMI (interest) on the home loan. You will not be able to avail a tax deduction of INR 2 Lakhs on the interest portion of your home loan, under Section 24 (b) of the income tax act.
You are losing tax benefits on your home loan, for no fault of yours. You are also paying rent, as you have not yet got possession of the apartment. This is a huge financial loss. You can file a consumer complaint against the builder for denial in service and ask for a refund of paid amount + interest. If the builder has a lot of power and is a dominant player (powerful guy), in the real estate market, file a complaint before the Competition Commission of India.
Yes…the builders in India are known to abuse their power. The builder makes an agreement with you and charges you a very high penalty, if you delay making the payments, while purchasing your apartment. If the builder doesn’t deliver (give you possession) of your apartment in time, there is almost no penalty. The dice is heavily loaded in his favor. Time to get even.
Be Wise, Get Rich.
Mr. C S Sudheer is the founder and CEO of IndianMoney.com – India’s largest Financial Education Company. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.
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