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What if project is delayed due to litigation?

Saturday, March 17, 2018
By Ramesh S. Prabhu

Q. If a project has to be delivered by Dec 2019, but the project after few months of construction goes into some litigation for next 5 years, what would be the impact on the developer & buyers? What should the buyer do?
Under RERA, if the project is delayed due to litigation in which the court has given the stay for the construction, then the developer may not be liable to pay the interest to the purchaser for delay in the completion of the project from the agreed date of possession mentioned in the agreement for sale. The period during which stay was in force will only be excluded for payment of interest. In case, there is only litigation but the court has not given any stay and there is a delay, the developer shall be liable to pay the interest for the delay in handing over the possession to the purchaser from the date of agreed date of possession on the amount paid to the developer till the date of handing over the possession at the rate of Marginal Cost of Lending of SBI plus two percent.

Q. Is the Pagdi system legal now? After death, will property be transferred to kin of family by law (if one child claims Right)?
As per the Maharashtra Rent Control Act, 1999, the tenancy rights will be transferred to the person who is occupying the premises at the time of death of the tenant. The legal heirs may decide the rent or the tenancy rights on the death of the tenant.

Q. What is the provision for refund of stamp duty if the property is sold within one Year?
In case a person has purchased the property from the developer and sells the same within one year, the new purchaser needs to pay only the difference due to increased cost of sale or the increase in the market value as per the stamp duty ready reckoner. For example, the stamp duty is payable on every transaction of purchase and sale as per the market value of the property as per the valuation given in the ready recknor. However, in Maharashtra an exception was given.In case, any person invests in the property and registers the agreement with the developer and say pays the stamp duty at the rate of 5% on the valuation of the property of say Rs.1,00,00,000/- pays the stamp duty of Rs.5,00,000/-.  Within one year, such purchaser decides to sell the property say for  Rs.1,10,00,000/-, then the stamp duty on Rs.1,10,00,000 is calculated which is Rs.5,50,000/-. Since the first owner has paid Rs.5,00,000/- on value of Rs.100,00,000/-, the new purchaser has to pay only the difference of Rs.50,000/- only and thus gets the credit of stamp duty amount paid of Rs 5 lakh by the earlier owner. This is not applicable for other than the first sale and other than from the developer.

Q. How to get information about property card? What important role does property card plays in property claim agreement?
In the agreement for sale executed with the developer, the land details are mentioned. The land details include the survey number or CTS number of the land and the village in which such properties are situated. On the basis of survey number and village, one may visit the local city survey officer or talati office and get the extract of the property card or the 7/12 extract which has the details of the land such as the area, survey number, use of the land, the details of the transactions, name of the owner or the lease etc. The property card gives us the name of the owners who own the property in the revenue record.

(Ramesh S. Prabhu is Chairman, Maharashtra Societies Welfare Association)

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