no, he can't charge interest from you..
Builder is delaying sale of agreement
I have been an allotted a plot in a project which is RERA registered and the builder is one of the prominent builders of Delhi NCR. According to the allotment letter I have to pay 10 percent at booking and 50 percent of the total cost within 60 days of booking/allotment. But now that 60 days have been passed but the builder has not entered into a sale of agreement with me. I have paid up till now 25 percent of the total cost. Builder is saying I have to pay interest on the remaining 35 percent if not paid on time. Also, I had planned to take a 75 percent loan from the bank to fund this purchase which is asking for the sale of the agreement for disbursements. I have read in RERA Act that promotors cannot ask more than 10 percent before registering the sale of agreement. I have no money to cover the payment as the bank is not ready to finance it without agreement. Is it legal that the builder can charge interest on delayed payments without entering the sale of agreement also is it legal to ask more than 10 percent before agreement
Asked 4 years ago in Property Law
Religion: Hindu
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16 Answers
Inform the builder that you are unable to make further payment as no agreement for sale has been entered into and no bank is willing to grant any bank loan in absence of agreement
2) that you have already paid 25 per cent of total sale price and as per RERA builder cannot ask further payment in absence of agreement
you are correct
as per RERA the builder CANNOT charge more than 10% of sale price without first entering into a registered agreement with the buyer
the builder's demand for interest is illegal
issue him a legal notice to immediately register an agreement with you as per the RERA model agreement format
if he does not comply, then approach Rera by filing a complaint
your prayers will be:
builder to register agreement
builder to be directed not to charge interest and for a declaration that the builder's demand for interest is illegal
If the builder is acting in violation of the provision of RERA then you can lodge complaint with RERA Tribunal.
If there is no sale agreement as in your case the builder can not ask much of money.
It's a fit case where you can file case before the consumer forum as well.
Dear sir/maam,
A sale agreement is necessary before any interest/sum is charged. no agreement- no imposition- no payment.
- .
You communicate the bank's requirement for sanctioning the loan to the builder in writing and insist on the agreement to be executed.
You may send this communication in the form of a legal notice from your side and mention that if he is not providing the required sale agreement then the booking would be cancelled and he would be liable to return the booking amount with market rate interest from the date of booking since it is his fault for not providing the proper documents.
You may also hint that he will be dragged to RERA or consumer forum if he fails to comply with the requirement.
- As per Sub-Section 1 of Section 13 of The Real Estate (Regulation and Development Act,), A builder will have to enter into an agreement to Sell with a home buyer, and then accept the booking amount which should not be more than 10%.
Hence demanding more payment or interest prior to registration of Sale agreement is against the Law.
- Further, if you pay the amount demanded by the said builder against the Act , then you may face problem , specially when the builder could not get OC etc from competent authority or delay in handing over the possession.,
- Hence, the said builder cannot charge interest or any amount without entering into an agreement with you, you should deny the same.
- If , no response, then you can approach RERA against him.
Hi, as per RERA Act the builder has to demand only 5% for registering the Sale Agreement. Further, you are not entitled to pay any interest as claimed by the builder. It is better you can register the complaint against the builder before the RERA Authorities.
sir
you are correct that the builder cannot charge more than 10% without executing the sale agreement under clause 13. if the builder asks anything against the law then you can file complaint in HRERA. to avoid harassment, ask the builder to give demand in writing (if it is not in writing). if it is in writing then file the complaint now in rera so that your matter is resolved in time.
good luck
Also I wanted to know if payment terms will be changed as the sale of agreement registration is delayed and new payment terms should be reflected in the agreement also.
Asked 4 years ago
Payment terms should be changed and interest waived by builder as he failed to enter into registered agreement for sale
yes
sale deed is executed after receipt of whole amount therefore it will not matter how the money was paid and the builder will mention only the amount paid for purchase. there will be no term of payment etc.
if your query is about booking/ agreement to sell then terms cannot change and if builder changes the terms then you can approach RERA for correcting it.
You can file the complaint in the above circumstances before rera
Dear Sir,
As there was no sale agreement you can specify the payment terms that is feasible for you and that you want to include after which you can sign on the agreement to make it legally binding. Thank you.
The agreement already entered into would not be altered for this reason.
You may have a supplemental agreement to enforce this changed new payment terms.
- Yes, the new payments terms must be reflected in the agreement , if changed.
- However, if the earlier agreement already registered , then you cannot change any content of it .