Homebuyers Don’t Lose Delay Interest Claim After Accepting Possession, Rules MahaREAT
Mumbai: A homebuyer accepting possession of a flat which has missed its dateline or delayed by builder does not automatically lose the right to claim interest for the delay, the Maharashtra Real Estate Appellate Tribunal (MahaREAT) has ruled, dismissing an appeal filed by Kanakia Spaces Realty Pvt Ltd. Section 18 Right Remains Intact The tribunal held that the statutory entitlement to interest…
Mumbai: The Maharashtra Real Estate Appellate Tribunal (MahaREAT) has clarified that a homebuyer who accepts possession of a delayed flat does not forfeit their entitlement to interest for the delay, as ruled in an appeal dismissed by the tribunal. Section 18 of the Real Estate (Regulation and Development) Act, 2016, mandates the crystallization of this statutory right when a developer fails to deliver possession within the agreed period.
Accepting possession later does not waive this right unless the buyer consciously and explicitly relinquishes it. Maharashtra RERA Advocates, led by Adv. Anil D Souza, noted that despite Supreme Court and Bombay High Court precedents affirming buyers' rights to interest and compensation, builders still file unnecessary appeals to deter buyers.
The tribunal emphasized that these appeals should not exceed two to three hearings or extend beyond a year, citing Supreme Court precedents. The case involved Flat No. 3205 on the 32nd floor of Kanakia Spaces’ "Levels" project in Malad (East), where the buyer, Subhash Mahadappa Panchgalle, had an Agreement for Sale signed on February 1, 2017, with possession due by October 2018, including a six-month grace period.
The buyer had paid 80% of the consideration, with the remaining balance payable upon possession. The developer contested the buyer's right to interest, arguing that acceptance of possession after full payment nullified the claim. However, the tribunal dismissed this, referencing the Supreme Court's judgment in M/s Newtech Promoters and Developers Pvt.
Ltd. vs. State of UP, which established that the entitlement under Section 18 is linked to the developer's failure to deliver possession within the agreed timeline. The tribunal further clarified that an Occupancy Certificate or RERA registration extension cannot extinguish an accrued right to interest. The buyer's right to interest crystallized upon the promoter's failure to deliver possession within the agreed period, continuing until actual possession. The appeal was dismissed, and both parties were ordered to cover their own costs.
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