The Telangana Real Estate Regulatory Authority has ordered a developer to pay 10.7% interest on a flat purchase due to an 18-month possession delay. The regulator rejected the builder’s Covid-19 excuse and scrapped an unauthorized Rs 30,000 debris fee.
The Telangana Real Estate Regulatory Authority has passed a strict order against a developer for failing to hand over a property on time. The regulator found the builder responsible for an 18-month delay in providing possession of a flat valued at Rs 44.36 lakh. As part of the ruling, the authority mandated that the developer pay 10.7% interest per annum on the total amount paid by the homebuyer, calculated from the end of the promised grace period until the actual handover.
Covid-19 Defense Rejected
During the proceedings, the developer attempted to justify the construction delay by citing pandemic-related disruptions and labor shortages. However, the regulator dismissed this argument entirely. The authority noted that the sale agreement between the parties was signed well after the global health crisis had subsided, meaning the builder could not claim the pandemic as a valid reason for the project stall. This highlights the regulatory focus on ensuring developers adhere to agreed-upon timelines, regardless of past external circumstances.
Unauthorized Charges Scrapped
The order also addressed the developer’s attempt to levy an additional Rs 30,000 'debris fee' on the buyer. The regulator ruled that this charge was not part of the original Agreement of Sale and violated statutory requirements under the RERA Act. By forcing the developer to return these funds, the authority reinforced the principle that costs not explicitly documented in the initial contract are unenforceable. The developer, who had already received over Rs 40 lakh from the buyer, was unable to justify why this fee was applicable.
Impact on Homebuyers
This decision provides immediate financial relief to the affected buyer and serves as a reminder for prospective property owners to review their contracts thoroughly. The developer has been ordered to clear the interest arrears within 60 days. The case underscores the role of RERA in protecting consumers against project delays and hidden costs. For those currently looking at property investments, this ruling emphasizes the importance of verifying every clause in a sale agreement, including maintenance, administrative, or 'other' charges, to ensure they align with the original purchase price and statutory norms.