The Tamil Nadu Real Estate Regulatory Authority (TNRERA) has ruled that a builder cannot keep 10% of the property value, if the time schedules as per agreement are not followed. It directed Alliance Villa Pvt. Ltd. to refund advance payments made by home buyers along with interest, for non-commencement of project construction.
In their petition, Mohana Sundhari and Nagalingam said they had booked a villa in the builder’s project ‘Humming Garden’ in Thaiyur, Kelambakkam, Chennai and the total cost of the project was about ₹1.34 crore and they had paid ₹16 lakh.
On 10.04.2019, the buyers told the builder in an email communication that they wanted to cancel the booking due to their financial position and sought for cancellation of the booking and a refund of the amount paid. The builder responded that he was deducting 10% of the value of the villa. The home buyers said no construction activities had taken place and sought a full refund.
TNRERA noted that the home buyers were not provided with copies of agreements and title deeds and it is an unfair trade practice adopted by the builder.
It also noted that the builder has not complied with Section 13 (2) of the RERA Act in terms of agreements of sale and construction.
The builder has not sent any notice for further payment subsequent to the execution of agreements for payments as per the payment schedule without dates in the agreement, which implies there was no construction activity, as stated by the buyers, TNRERA said.
It also noted that as per Rule 19 (2) of the Tamil Nadu Real Estate (Regulation and Development) Rules, 2017, the home buyer shall get a full refund at any time if the builder has not followed the time of schedule and the later shall not keep 10% of the booked value of the property.
TNRERA directed the builder to refund the amount at 7.5% per annum, along with the litigation costs fixed at ₹25,000.
