The Bombay High Court has ruled that legal heirs and property transferees can claim interest from developers for delayed possession under RERA. The court rejected the defense that municipal approval hurdles act as force majeure, preventing developers from avoiding penalties. This strengthens homebuyer rights by ensuring that the right to compensation is tied to the property, not just the original buyer.
The Bombay High Court has ruled that legal heirs and property transferees are legally entitled to claim interest from developers for delayed home possession, confirming that the right to seek financial compensation is tied to the property itself rather than the original buyer. Under the Real Estate (Regulation and Development) Act (RERA), this judgment prevents developers from using the death of an original buyer or the transfer of property title to evade financial liabilities for missed project deadlines.
In a recent case, the court firmly rejected the argument that delays caused by municipal approval hurdles constitute a force majeure event. Developers often use this legal defense to justify project stagnation, claiming that circumstances beyond their control hindered progress. The court clarified that obtaining necessary regulatory clearances and ensuring adherence to local building codes are fundamental responsibilities of the developer. Consequently, builders cannot offload the financial consequences of their own planning or execution failures onto homebuyers or their legal successors by blaming bureaucratic delays.
The ruling followed a case where the court ordered a developer to pay 9 percent interest per annum on a sum of Rs 5.51 crore. The delay in this specific project spanned 12 years, covering the period from March 2008 to February 2020. While the claimant had initially requested a 12 percent interest rate, the court decided to enforce the specific rate stipulated within the original sale agreement. This decision serves as a reminder that contractual obligations regarding interest payments remain binding long after original possession dates have passed, provided the successor can verify the valid transfer of ownership and document the builder’s failure to deliver.
For homebuyers and investors, this ruling provides clarity on the enforceability of claims under RERA. It reinforces the principle that developers remain accountable for project timelines, regardless of changes in ownership or attempts to cite common administrative hurdles as uncontrollable events. This precedent makes it significantly more difficult for developers to sidestep compensation obligations in disputes involving heirs or secondary buyers.
Moving forward, the primary monitorable for those involved in RERA disputes will be the strength of documentation regarding ownership transfer and the timeline of the builder’s failure to deliver possession. As this precedent stands, homebuyers and heirs have a stronger legal basis to pursue interest claims, potentially reducing the ability of developers to use procedural complications as a shield against legitimate liabilities.