Investing in property is rarely risk free, especially when the property is still under construction. Given the large number of abandoned and incomplete projects that are gradually turning into ruins, it is only natural for investors to feel concerned about the safety of investing their money in properties that are still under construction. There are ample examples of people, who have invested in an under construction project several years ago and have been promised possession after a couple of years, are still waiting for the project to get completed. People who are facing this problem not only have to face great financial burden but the stress of being involved in a constant dispute with the builders.
There are several reasons that might cause real estate developers to abandon a project without completing it. The most common of these include changes in the design plans not approved by the municipal body, dispute between various partners handling the project, lack of enough funds due to the builders having invested in multiple projects or due to the current project having crossed the established maximum budget limit by a huge margin. Irrespective of the reasons, the disastrous consequences of investing in an incomplete property have to be borne by the people, who have put in their life savings into the project.
Many times the buyers, who have invested in projects left incomplete by the builders, come together to create a forum of sorts act legally against the builders. But with such an approach, the buyers end up spending a significant amount of money to pay the lawyers representing them in the court of law. Even then, the buyers cannot be assured of certain relief as in most cases the builders have a team of best lawyers specialising in real estate disputes and who are paid extremely well by the builders to safeguard their interests in such situations. However, there are also several instances where the courts have ruled in favour of the buyers and instructed the builders to not only complete the projects within a specific time period but also pay some compensation to the buyers. Sadly no amount can make up for the extreme stress and inconvenience faced by the investors.
In order to avoid being caught up in a situation similar to those described above, it is important for people planning to invest in under-constructions properties to consider the following aspects.
- The first and the most important thing that the buyers need to check is whether or not the builders are the rightful owners of a legally transferred land deal where the project is planned. The investors should not only check as to whether or not the project has been pre-approved by the bank but also gain information about its APF number.
- The investors should also seek information about other construction approvals that the builders should have acquired before starting construction of the project and complete it in a hassle free manner. These can include the Commencement Certificate (CC), Intimation of Disapproval (IOD) as well as clearance certificates from environmental board and approval of floor plan.
- The buyers need to be aware of the fact that according to the postulates of the Consumer Protection Act, they share a special relationship with the builders. So, when the investors of an incomplete project approach the consumer forum with an application against the builders, they are likely to get a favourable judgement, depending on the merit of the case filed by them.
In case the buyers intend to take a legal course of action, they need to follow the below mentioned steps.
The buyers need to create a forum with the other affected investors and then appoint a lawyer to file a case in the court of law as a single entity. The case will be filed under the Consumer Protection Act.
- The court can issue a directive to the forum of buyers and investors to file a FIR against the property developers for cheating and breach of trust of the buyers.
- The buyers should also file a case in the court of law for seeking monetary compensation and getting possession of the property at the earliest or to get a refund of the money invested by them along with the interest for the delay period.
- In most cases, the court will generally direct the developer to complete the said project within a specific time and in case the builder is not able to adhere to the deadline set by the court, the legal body can charge the developer with a case of contempt of court.