Legal Procedure To Recover Advance Or Deposit From Builders

By Author: Adv. Sapna Malik
Total Articles: 9
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“LAWYERS HAVE THE ABILITY TO CHANGE INJUSTICE TO JUSTICE AND WEAKNESS INTO A STRENGTH”.

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The advance payments or deposits reflect the contractual relationship between buyer and seller regarding the transfer of immovable property. This amount is part of the purchase money, whereas the balance payment is promised to pay on a future date.

LEGAL RIGHTS OF PROSPECTIVE BUYER

According to section 55(6)(b) of the Transfer of Property Act of 1882, a prospective buyer has the right to charge on the property the seller or anyone claiming it under him, for the amount of purchase money (advance deposit) he paid as part of the sale agreement. So, if the buyer hasn't broken any of the contract's terms, he has every right to use the law to protect his rights against a seller, such as a builder or a contractor, to get their money (advance ...
... payment) back or, if possible, adhere to the terms of the sales agreement.

LEGAL RIGHT OF BUYER TO CLAIM COMPENSATION

In addition, section 21 of the Specific Relief Act, states the defaulter party in case of a breach of the contract needs to pay compensation for the losses and damages that the other party had to suffer due to the contract breach. In such cases where the contractor or seller fails to fulfil their contractual obligations, the buyer can demand a penalty, provided the penalty clause is there in the agreement.

WAYS OF MISUSING THE ADVANCE DEPOSITS BY THE BUILDERS OR DEVELOPERS

Here are a few situations where the contractor or builder do not follow the agreement terms.

● Delay in possession beyond the possession date without any significant reason.
● By diverting advance payments in other projects or using it for personal use.
● By making a false promise regarding the specifications of the property.

LEGAL METHOD TO RECOVER ADVANCE DEPOSIT FROM BUILDER

Send a legal notice

The suffering party can send legal notice to the defaulter. If you are residing in Gurgaon, you can consult a corporate dispute lawyer in Gurgaon and discuss the further procedure in detail. The legal notice is the initial step to engage builders in legal disputes. Many times builders do not reply in the stipulated time. In such a case, your attorney will help by sending another notice to the defaulter party.

Filing a complaint under RERA

A buyer should always check the RERA status of the builder. If your builder is registered under RERA, then customers can file a complaint online on the RERA portal and demand a refund from the builder.

Moving to a Consumer Forum

A buyer can also file a complaint under the consumer form. There are many examples where consumer court has directed builders to repay the advance, the penalty with penal interest to buyers.

In property dealing, property disputes and delays from the builder's side are common. However, there are acts to safeguard the interests of buyers. Therefore, without wasting time, you need to hire a corporate lawyer in Gurgaon and discuss a further plan of action in detail.

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