Delayed possession is one of the most common grievances faced by homebuyers, often forcing them to wait years beyond the promised delivery date. This may become a financial burden for the homebuyer, especially if they are paying home loan EMIs while continuing to live in a rented house and paying rent. Hence, this makes many people ask: can a buyer seek compensation for such delays?
In a recent judgement that could act as a precedent for several cases, the Supreme Court said that homebuyers can claim for delayed possession in appropriate cases.
The ruling came in the case of a buyer who became a member of a Delhi-based housing society in January 2003, paid the full amount, and was allotted an apartment. Both parties entered into an agreement on February 27, 2004.
After facing a long delay in getting possession of the apartment, the homebuyer approached the consumer forum on August 8, 2005 seeking compensation. Still awaiting closure, the complainant’s two-decade long fight might finally come to an end soon as the apex court has made a major ruling in the case now, according to a news report by The Economic Times.
What did the SC ruling state?
The recent SC ruling noted that the homebuyer can make a claim for compensation for delayed possession. “The subsequent receipt of possession cannot, by itself, extinguish the right of the allottee to seek adjudication of a claim for compensation for the alleged delay,” the top court was quoted as saying by the news publication.
Before the matter reached the apex court, the Delhi-based had approached the district consumer forum, alleging a deficiency in service due to the delay in handing over possession of the flat. The dispute was referred to arbitration in July 2009, and the order was affirmed by the Delhi State Consumer Disputes Redressal Commission in February 2013.
The homebuyer then approached the National Consumer Disputes Redressal Commission (NCDRC), which dismissed his revised petition in January 2016. The NCDRC had dismissed the revision petition on the ground that the homebuyer was not a consumer at the time of filing of the complaint. However, the disagreed, observing that the National Commission’s reasoning “cannot be sustained” and setting aside its finding.
The top court added that the homebuyer’s complaint was not for delivery of possession simpliciter and his grievance was that there was a delay in handing over possession of the flat and he was entitled to compensation for such delay, the news publication reported.
Can homebuyers seek compensation for delay even after taking possession?
The Supreme Court held that a homebuyer can approach consumer forums against developers to seek compensation for delayed possession of flats even after they have already taken possession of the flat.
With this, the apex court also set aside the NCDRC’s 2016 order, which had ruled that the homebuyer was no longer a “consumer” when he filed the complaint since he had already accepted possession without protest.
SC observed that a claim for compensation relates to the period during which possession was delayed. Therefore, simply taking possession of the property cannot, by itself, extinguish the right of the homebuyer to seek adjudication of a claim for compensation, the news publication reported.