Builders Can NOT Levy Cancellation Charges If Project Is Inordinately Delayed: NCDRC

Under-construction property
Under-construction property

 Attention buyers. If you are struggling with the issue of delayed property, and want to go ahead and cancel the booking, be informed that the builder/developer can NOT force you to pay any cancellation charges whatsoever.

It is seen usually that the developers put harsh hidden clause in the agreement to discourage the home buyers from cancelling the allotment even if they are delaying the delivery. In some cases, amount as high as 15% of the unit is sought as cancellation charges. However, National Consumer Disputes Redressal Commission (NCDRC) has declared that real estate companies cannot invoke such clauses in cases where buyers are forced to seek cancellation due to inordinate delay in completion of any project.

The declaration was made by national consumer commission passed the order in favour of complainant Chandan Gupta who has booked a residential flat in ORB Towers in Sector 74, Noida by the developer Supertech, TOI reported. The flat was supposed to be delivered by December 2016, after including the six-month grace period.

When Supertech failed to hand over the delivery of the ready home, the buyer sought cancellation of allotment and approached the NCDRC when the developer refused to refund Rs.1.08 crore which the buyer had deposited so far.

When NCDRC directed the builder to pay back the amount, the developer contended that it was entitled to forfeit 15% of the cost of the unit as cancellation charges as per clause 37 of the agreement between the parties.

Slamming Supertech’s claims, NCDRC has directed the builder to refund the buyer within the three months the entire principal amount of Rs. 1.08 crore along with compensation in the form of simple interest at 10% per annum from the date of payment till the date of refund.

Know more about inordinate delay here.

NCDRC’s judgement does comes as a breath of relief for thousands of home buyers who are struggling to get the delivery of their homes in NCR as well as other part of the country.


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