‘Builder has to pay for delay in giving flat’

A builder cannot refuse compensation to a buyer if he fails to keep his promise of handing over possession of a flat within a stipulated time, the national consumer court ruled on Monday.

The court said the builder also cannot pay less than the agreed amount of compensation, on the plea that the price of the property has gone up and, therefore, the buyer stands to gain anyway.

“Such a contention of any builder is unjustified and unreasonable because after sale of the property all the benefits accrue to the purchaser and not to the vendor,” the National Consumer Disputes Redressal Commission said.

“In any case, if such contention is accepted, the builders/contractors would earn crores of rupees by delaying the delivery of possession of the flat/property for months together for one reason or the other,” the commission headed by Justice M.B. Shah said.

The compensation clause is usually decided between the buyer and the builder and put on the agreement papers at the time of the deal.

The ruling came on a complaint by two buyers who demanded 24% per annum interest from a builder for delaying possession.