Although there has been a lot of progress in the Indian real estate market, there are still problems with delayed projects and dishonest building and development methods. A startling 4.12 lakh residential units, valued at over ₹4 lakh crore, are presently stranded in stalled projects, according to the Indian Banks’ Association (IBA). For homebuyers, this has resulted in severe financial and psychological suffering.
It’s critical to comprehend your legal choices in order to defend your interests and pursue remedies against project delays and possible fraud. The main legal options open to homebuyers are described in this blog post.
The Increasing Risk of Builder Theft
In India, builder fraud has grown to be a major worry. There are more and more cases of developers misrepresenting buyers, embezzling money, and producing inferior properties.
Fraud Cases by Builders:
➡️Homebuyers allege Prateek Group defrauded them of Rs 190 crore
Source: Business Standard
Noida homebuyers allege Prateek Group fraud worth Rs 190 crore. The Delhi Police’s Economic Offences Wing has registered an FIR against the developer and its executives, accusing them of selling smaller flats (10-12% smaller than advertised), violating construction plans, and delaying deliveries. The 20 homebuyers claim the developer collected Rs 12.8 crore as one-time lease rent but only paid Rs 6.4 crore to the Noida Authority. The complainant mentioned that the flat he booked in April 2012, promised for December 2015, was only handed over in February 2019, despite having paid 95 per cent of the total cost by May 2016.
➡️3 Arrested for Alleged Real Estate Fraud Worth ₹60 Crore in Hyderabad
Source: The Times of India
Hyderabad, India: Three real estate developers have been arrested by Cyberabad police for allegedly defrauding investors of ₹60 crore. The accused, identified as D Nagaraju, M Shivarama Krishna, and T Narasimha Rao, were the chairman, managing director, and CEO of Bharathi Builders, respectively.
According to police, the trio lured investors with promises of pre-launch offers for residential apartments in Kompally. However, instead of constructing the apartments, they sold the entire land parcel to another party. The economic offences wing of Cyberabad police registered a case and appealed to the public to be cautious of such fraudulent schemes.
➡️Only 195 Out of 31,515 Ongoing Real Estate Projects Have Complaint Redressal Cells
Source: The Times of India
The MahaRERA report reveals that only 195 out of 31,500 ongoing real estate projects in Maharashtra have established complaint redressal cells. This lack of compliance has led to numerous complaints and disputes between developers and homebuyers. The MahaRERA chairman emphasized the importance of a grievance redressal mechanism for the construction sector to evolve from a product sector to a service sector.
➡️ED Uncovers ₹1500 Crore Real Estate Scam in Hyderabad
Source: The Times of India
The Hyderabad-based Sahiti Group has been accused of a ₹1500 crore real estate scam. The ED has launched a money laundering investigation, following complaints from homebuyers who were duped by the group’s false promises. The agency has conducted searches on Sahiti Infra and the Phoenix group, linked to the scam. This action brings relief to thousands of affected homebuyers.
➡️UP RERA Puts 400 Projects on Notice
Source: ET Realty
The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has issued a strong warning to 400 group housing projects in the state. If these projects fail to upload the necessary land records and maps on the RERA portal, they risk being placed in abeyance. They have noticed that 160 of these projects have not uploaded both the map and land record.
UP RERA has taken this step to safeguard the interests of homebuyers and prevent fraudulent activities. The regulator has repeatedly reminded promoters to submit the required documents, but many have failed to comply.
Homebuyers’ Legal Options
Authority for Real Estate Regulation (RERA):
1. Provides a streamlined method for settling conflicts.
2. Provides remedies such as possession, interest, and compensation.
3. Relevant to RERA-registered projects.
The Consumer Protection Act:
1. Offers remedies like compensation and refunds while defending the rights of consumers.
2. Relevant to initiatives that are registered or unregistered.
The Code of Insolvency and Bankruptcy (IBC):
1. Is applicable when the developer is experiencing extreme financial hardship.
2. Permits the developer to reorganize its financial structure.
Civil Courts:
1. An expensive and time-consuming choice.
2. May be used to demand damages or particular performance.
Criminal Complaint:
1. A criminal complaint may be made in situations involving fraud or deception.
2. Requires substantial proof.
Additional Tips
• Extensive Due Diligence: Before making an investment, thoroughly investigate the builder, the project, and the property records.
• Buyer’s Agreement: Go over and comprehend the terms and conditions of the selling agreement carefully.
• Documentation: Keep thorough records of all correspondence, invoices, and project updates.
• Legal Counsel: To learn about your rights and alternatives, speak with a real estate attorney.
• Create an Association of Buyers: Getting together with other impacted purchasers can help you make a stronger case.
Find essential helpline numbers for various states to report real estate fraud.
Conclusion :
Being aware of your legal rights and exercising caution are necessary to safeguard yourself from builder fraud and delayed projects. By understanding the available options and taking proactive steps, homebuyers can increase their chances of a successful outcome. Remember that protecting your interests requires getting legal counsel as soon as possible.
Notice: Nothing in this blog post should be construed as legal advice; it is just general information. A knowledgeable lawyer should be consulted in order to receive advice particular to your case.
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