Practical approach by Home buyers to Deal with Real Estate Developer's Insolvency

Jaypee Infratech it is the first real estate company that has entered insolvency proceedings though there are a lot like Kohinoor Group,Mumbai are facing liquidation proceedings.

The insolvency proceeding will give answer a lot of questions like : 

1) what is claim preference when a so called Real Estate Developer raise money from bankers and customers in the pretext of constructing a building, divert money and than claim insolvency. 

2) can secured creditor (who are just part owner of property) can do whatever it like ? Without consent of customers?

3) Are customers are also secured creditors to the extent of their ownership in the under construction unit? ( RERA recognises this and that where it require 70% consent of all customers)

Bankruptcy law has made it simpler to go bankrupt without realising fate of customers.  So what should the home buyers do when real estate developer take short cut and declare himself insolvent?

Don't give easy turf to Bank or Developers

Buyers can give tough fight to all stake holders to protect their interest. They need to do detailed SWOT and realise following : 

a) in an ongoing project, where construction of complete more than 30-40% complete than bankers security on remaining unsold unit is zero unless it is completed. Here buyers and bankers are on same risk zone and hence "Advantage buyers to stop any arbitrary decisions by lenders"

b) File breach of trust cases against developer since money was paid to him for construction and not for repayment of his loans/interest or personal profiteering. Profits are not accrued to developer till completion of project.

c) Raise your claim in The National Company Law Tribunal ( NCLT)

(i) Claim that the money that was paid by him (Buyer) was never meant for repayment of secured creditor. The secured creditor was paid by developer through diversion of money and breach of trust. The secured creditor is making undue profits in all cases. 

(ii) No order of NCLT should be passed without detailed investigation in accounts of the developers. Buyers should claim first right on  all assets purchased by Developer with the help of diverted money, since the diversion itself was breach of trust.

d) Form larger groups : 30000 buyers of Jaypee must be paying atleast Rs 150 cr EMI to various bankers. They can collectively negotiate with bankers on EMI and revival. Always take into account how much money secured creditor has already received back (Interest and repayment of capital) rather than just their outstanding.

e) Don't Wait and watch : Patience is the biggest problem with Home Buyers in India. Nothing will change unless thousands of home buyers come together and make sure that there is constant pressure on government, administration, developer, secured creditor and judiciary.

f) Find out if other customers have initiated actions under Indian Penal Code, Negotiable Instrument Act etc against the Developer and how can you strengthen their case.

Finally, customers need to make sure that developers just don't abuse process of law and get away to London or Dubai !

125000 users connected now with

Best Real Estate Review Website on Face book

Check out how users are using www.cheatedbuyers.com

Has Your Builder Delayed Possession of the House? Check the Possible Remedies!

Real estate is the fastest flourishing sector in India. In the last two decades, the real estate sector has seen tremendous growth and a lot of builders are investing a large sum of money in their dream projects.

Though there in an increase in demand, as well as the supply but most of the developers, fail to fulfill the promises that they have made during the first meeting. Delayed possession of the house has become a common phenomenon in the Indian real estate market.

There are few remedies which can help you if your builder is taking too long in providing the possession of the house. Though the Legal Action against builders is somewhat time-consuming but the overall benefits of the process make it worth.

The legal options

First of all, if there is a delay in the possession and the builder has denied providing the exact date for the possession, you can file a complaint in the consumer court. Alternatively, you can also file a civil suit against the builder for the refund of the total amount that you have paid with interest.

If the builder is a dominant entity and he is using his popularity to undermine your demands, you can also file a case against him in the Competition commission of India. CCI ensures that the competition in the market is fair and every supplier provides the best quality product to the customers.

Notable judgments by different courts

The Supreme Court of India has clearly said in more than one case that the service delayed is service denied. Though such claims do not cover the immovable properties but the role of builder comes under the ‘deficiency of rendering of the services’.

In a number of different cases, the Consumer Court has awarded compensation to the allottee and asked the builder to refund full amount with the interest up to 12 percent per annum. The National Consumer Commission has clearly mentioned in many judgments that builder does not have any right to deduct the amount from the refund as he has failed to provide the services.

With a little knowledge about the law and by keeping options to take Legal Action against builders in hand, you can survive the mental and physical harassment done by the builder and see him pay for his deeds.

To Know More about Best Real Estate Review Website  visit us at http://www.cheatedbuyers.com

125000 users connected now with

Best Real Estate Review Website on Face book

Check out how users are using www.cheatedbuyers.com