PUNE: A property developer is legally bound to mention a firm date of delivery of possession of flat in the agreement for sale with the buyer. Such dates can not be the date before the developer secures completion certificate for the property from the local body.
The National Consumer Disputes Redressal Commission (NCDRC) has held this in a significant ruling, which also upheld the flat purchaser’s right to inspect title deed documents, approvals to building plan and layout and encumbrances on property before signing an agreement with the builder.
The ruling by a two-member bench of Justice VK Jain and expert member BC Gupta on May 6 reaffirmed the developer’s legal obligation to specify in each advertisement or brochure, the common areas and facilities available to all apartment owners. Not making such indication amounts to inducing purchase of property by giving a false impression, thereby committing unfair trade practice, the commission held.
In a dispute over signing of a lop-sided agreement favouring the developer, the NCDRC directed Mumbai-based Sahajanand Hi Tech Construction Private Limited to pay Rs 10 lakh compensation and Rs 25,000 cost to Pimple Saudagar resident Rajeev Nohwar for deficiency in service and unfair trade practice. The developer had argued that other flat purchasers had signed the same agreement without raising any objection. Modifying the agreement for the complainant would lead to an anomalous situation vis-a-vis use of common areas.
The NCDRC ruled that if the complainant was willing to sign the agreement and pay the remainder amount, the developer shall pay him Rs 10 lakh compensation within four weeks. Alternatively, if the complainant was not willing to execute the agreement then the firm shall refund him over Rs 1.58 crore with 12% pa interest along with Rs 10 lakh compensation.
On June 24, 2014, Nohwar had booked a 1,660sq ft flat at Lodha Belmondo project being developed by the construction firm at Gahunje off the Pune-Mumbai express way, for a price of over Rs 1.68 crore. In August 2014, the firm sent a pre-termination notice to Nohwar following a dispute over signing of the agreement and payments.
Nohwar had sought clarifications from the firm over common areas and facilities shown in its publicity brochure. He was unwilling to sign the agreement because the draft did not specify the date of delivery of possession and he was asked to declare that he had satisfied himself with all approvals and encumbrances on the property before execution of the agreement although, he was not shown the title deed and approval documents.
The draft agreement also provided that maintenance charges and property tax were payable from the date of offering the flat for fitouts. A perpetual deed between Sahajanand and Lodha Ideal Buildcon Private Limited over golf course, gym and other facilities was not shown to him.
Nohwar moved the National commission challenging the developer’s pre-termination notice on the grounds that certain clauses in the draft agreement were not in consonance with the provisions of the Maharashtra Ownership of Flat Act (MOFA) and the Maharashtra Apartment Ownership Act.
The bench referred to provisions under MOFA while holding that the complainant was justified in refusing to sign the agreement as the developer was under obligation to make full and true disclosure of all encumbrances on property besides providing copies of title deeds, approved plans and layouts to the buyer before signing of agreement.
Since the law requires the promoter to obtain the completion certificate before giving possession, the promoter while executing the agreement has to stipulate a specific date of delivery, the commission ruled.
Credits ET Realty