Tamil Nadu RERA Directs Builder to Refund Homebuyer and Pay Penalty for Unregistered Project
Tamil Nadu Real Estate Regulatory Authority orders refund to homebuyer and imposes penalty on builder for marketing unregistered project
ReraTamil NaduReal EstateHomebuyerBuilderPenaltyRefundUnregistered ProjectReal Estate NewsJun 22, 2024
The homebuyer had decided to purchase the villas based on the builder's advertisement. Initially, the homebuyer paid an advance of Rs. 1,00,000 and was allocated Villa Nos. 10 and 11 for a total of Rs. 1,01,12,336. However, the bank rejected the homebuyer's loan application due to insufficient legal clearance for the project land.
As a result, the homebuyer cancelled the booking and requested a refund of Rs. 10,11,234. The homebuyer filed a complaint before the District Consumer Disputes Redressal Forum, Coimbatore, which redirected the case to the State Commission for exceeding the forum's pecuniary jurisdiction.
The homebuyer later learned that the builder had sold Villas 10 and 11 to a third party. Aggrieved by the delay and conduct of the builder, the homebuyer filed a complaint before the Authority seeking a refund of Rs. 10,11,234 with interest. Additionally, the homebuyer sought direction for the respondent to register the project with RERA and reimbursement for litigation expenses.
The Authority held that the builder violated Section 12 of the RERA Act by falsely claiming title to the project land in their brochure, which misled the homebuyer. As a result, the Authority concluded that the homebuyer is entitled to a refund of Rs. 9,11,234 with interest at 10.75% per annum.
Furthermore, the Authority referred to Section 12 of The Real Estate (Regulation and Development) Act, 2016, which states that if any person makes an advance or a deposit on the basis of incorrect or false information contained in the notice, advertisement, or prospectus, and sustains any loss or damage, he shall be compensated by the promoter in the manner provided under the Act.
The Authority also imposed a penalty of Rs. 1 Lakh on the builder for marketing/selling the unregistered project and directed the builder to register the project within 30 days.
The case, V. Saravanan Versus M/s. Spring Field Shelters (P) Ltd., serves as a reminder to builders to comply with RERA regulations and to refrain from marketing and selling unregistered projects.
Frequently Asked Questions
What was the amount paid by the homebuyer to the builder?
Rs. 1,00,000 as an advance and a total of Rs. 1,01,12,336 for the two villas.
Why did the bank reject the homebuyer's loan application?
Due to insufficient legal clearance for the project land.
What was the penalty imposed on the builder by the Authority?
Rs. 1 Lakh for marketing/selling the unregistered project.
What is the rate of interest ordered by the Authority for the refund?
10.75% per annum.
What is the time frame given by the Authority to the builder to register the project?
30 days.
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