Legal Remedies available to a Homebuyer if the Builder is Illegally Constructing Additional Floors on the Property
There have been numerous incidences where developers arbitrarily amend the real estate project plans to seek greater profits. Reducing carpet area, constructing additional floors, changing the building layouts are some of the ways in which builders try to seek greater profits from one single project. However, buyers are not helpless if they encounter such situations. There are various legal remedies available to a home buyer when a builder arbitrarily constructs additional floors and make changes in the sanctioned plan.
Can a Builder/Promoter Construct Additional Floors?
A builder, promoter, or realtor can construct additional floors. However, before proceeding with the construction, the builder must obtain all the required permission and authorization from the competent authority [Real Estate Regulatory Authority] along with the consent of at least two-third allottees (home buyers) that have executed their respective sale deed with the builder. If the builder fails to satisfy the conditions laid down in section 14(2) of the Real Estate (Regulation and Development) Act, 2016 and constructs additional floors, such construction is illegal and the home buyers can take legal action for the same.
Prior to the implementation of the Real Estate (Regulations and Development) Act, 2016, change in sanctioned plans like construction of additional floors, changes in carpet area and so on were governed under the various Acts, which were different for every state. For instance, in Uttar Pradesh, matters related to apartments and their construction was governed by the Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010.
Importance of Builder-Buyer Agreement
It is no fact that in India builder-buyer agreement is slightly partial and is made in a way that benefits the builders and not the buyers. Before executing the sale deed with the buyer for a real estate property, it is very essential to pay close attention to the builder-buyer agreement. This agreement lists out all the powers and liabilities of the builder/realtor as well as the liability of the home buyer. Usually, the builder often put clauses which empowers him to make changes in the layout of the project without taking any prior permission of the buyers, which can be dangerous.
Though a builder-buyer agreement is an important legal document, it is not binding on the allottees if the agreement is framed to favour the builder. In Pioneer Urban Land and Infrastructure Ltd vs. Govindan Raghavan, [Civil Appeal No. 12238 OF 2018] the Apex Court observed that incorporation of one-sided and biased clauses in an agreement constitutes an unfair trade practice as per section 2(r) of the Consumer Protection Act,1986. Thus, home buyers can even approach the consumer forums to seek justice.
Why the Construction of Additional Floors is Dangerous
For constructing a building, there are many factors that decide the structure, height, space, and other architectural aspects of the same for ensuring that the building is safe for the home buyers to live in. FSI (Floor Space Index) of a real estate project decides the number of floors that can be built on a plot of land. A higher FSI means a builder can build more floors on a given plot of land. But what happens when a builder exceeds the FSI limit and construct additional floors? Such a construction is deemed dangerous for living as the plot may not support the building which may result in the building to collapse. Thus, any floor which exceeds the FSI limit is considered illegal in the eyes of the Real Estate Authorities as it’s not a safe place for habitation.
Rights of a Home Buyer
It is the right of the buyer to be well aware of the various permissions, registrations, certifications and authorizations regarding the real estate project in which he has invested his hard-earned money. A buyer can access the sanctioned plans and layout plans by paying a visit to the State’s Real Estate Regulatory Authority website or can even ask the buyer to provide for the same. According to section 19(4) of the Real Estate (Regulation and Development) Act 2016, a buyer is entitled to claim a refund of the amount paid by him along with applicable interest if the builder violates any provisions of the agreement of sale.
In Ferani Hotels Pvt. Ltd. vs. The State Information Commissioner (SIC) Greater Mumbai and Others. [Civil Appeal No. 9064-9065 of 2018], the Supreme Court of India while deciding the case asserted that a developer should mandatory display all the sanctioned plans and layout plans of the real estate project along with any other plans approved by the Regulatory Authority on the constructing site.
As clearly specified under section 14(2) of the Real Estate (Regulations and Development) Act 2016, it is the liability of the builder to take the prior consent of the allottees before making any changes/alterations to the sanctioned plan. Such consent must be freely given after the flat/apartment buyer has taken into notice all the disclosures of the proposed changes in the project by the builder.
Legal Remedies available to a Homebuyer under RERA
The Real Estate (Regulation and Development) Act, 2016 provides a forum to the buyers (allottees) where they can seek redressal of their grievances which often arise due to the misconduct of the builder/promoter or sometimes, the real estate agent.
If a buyer comes across a situation where he finds that the builder/realtor is illegally constructing additional floors on the real estate project, then he can do the following:
- Send a cease and desist notice (when the illegal floors are under construction)
If the illegal additional floors are under construction then a home buyer shall send a cease and desist notice to the buyer stating that the construction is illegal and he shall stop the construction of the additional floors immediately. Sending a legal notice to the buyer is considered as a strategic move as it would act as an evidence that the buyer raised an issue against the illegal construction, in case the matter is brought into the notice of the Real Estate Regulatory Authority or Consumer forum.
- File a complaint under the Real Estate Regulatory Authority of the state where the project is situated. [Section 31] (when the illegal floors are under construction)
If the builder refuses to comply with the provisions of the cease and desist notice sent earlier and continues the construction of the additional floors, then the buyer shall inform the Regulatory Authority of the State established under the Real Estate (Regulation and Development) Act, 2016 by filing a complaint under section 31 of the Act. Any aggrieved person can approach the Authority and file a complaint by submitting ‘FORM M’ along with a fee of rupees one thousand in the form of a demand draft (DD). The buyer can further seek interim order to restrain the builder/promoter from constructing additional floors until the matter is settled by the Regulatory Authority.
- Opting out of the real estate project [cancelation of agreement] and seeking refund/compensation. (when the construction of the illegal floors is complete)
Under section 14(1) of the Act, the builder is obliged to construct the real estate property in accordance with the sanctioned plan. However, if the builder has already completed the construction of the illegal additional floors and the buyer still wants to continue with the project then he can claim compensation with applicable interest from the promoter/builder by submitting ‘FORM N’ before the adjudicating officer.
A buyer can also cancel the booking of the flat and ask for a refund from the buyer. The buyer is obliged to refund the amount to the buyer within 45 days from such cancellation. It is to note that the amount of refund depends on the cancellation clause of the sale agreement and the builder-buyer agreement.
Legal Remedies available to a Homebuyer under the Consumer Protection Act of 1986
Section 79 of the Real Estate (Regulation and Development) Act, 2016 denies jurisdiction to civil courts for matters that concern the adjudication of power of the Regulatory Authority, adjudicating officer or the Appellate Tribunal. However, an aggrieved person can file a complaint against the illegal construction of additional floors under the Consumer Protection Act, 1986. In Pioneer Urban Land & Infrastructure Ltd & Anr v. Union of India [Writ Petition (Civil) No 43 of 2019] the Supreme Court held that the remedies provided to allottees of flats are concurrent and thus, can avail remedies under the Consumer Protection Act, 1986.
Buying a flat/apartment is always considered as a life changing decision for any home buyer and builders are well aware of it. To gain more profits from a single project, they often try to change the sanctioned plan and layouts by adding more floors on the property or by reducing the carpet area. Fortunately, with the implementation of the Real Estate (Regulation and Development) Act, 2016 homebuyers can approach the Regulatory Authority to seek relief from the builder’s arbitrary construction. Similarly, a buyer can also approach the Consumer forums for the same.
Authored By: Adv. Anant Sharma & Vaishnavi Srivastava