DEVELOPERS CHARGE INTEREST IF CONSUMERS DELAY ANY PAYMENT BUT DON'T PAY WHEN THEY ARE AT FAULT It's a long list of grouses, being held against real estate developers. Cases such as delayed possession, cancellation of allotments and charging excessive interest rates are very common. In fact, industry estimates say that out of every fresh 100 apartments, 60 to 70 of them are delayed for possession and the reason is due to slow construction.    Interestingly, the developers charge interest if consumers delay any payment or installment but in turn, they don't pay when they delay giving the possession. SundayET spoke to many police officials and they admitted that cases of delayed possession, cancellation of allotments and charging excessive interest rates come in large numbers but there is nothing substantial they can do as the terms and conditions of the agreement clauses between the two (developer and consumer) given clear indication for these kind of problems.    Lawyers, however, are of the view that instituting a separate regulatory body solely for the real estate sector is what can really work. Moreover, a grading system on the lines present in the UK and the US is needed as well. "In India, there is no proper grading system of builders. Grading system essentially means that a security deposit is taken from builders at the time of construction which is given back only after possession. Hence higher the grading of a builder, more will be the security deposit," says Sunder Khatri, advocate, Supreme Court of India.    For the Consumer Court, hearing such grievances on a frequent basis is nothing new. The thick file of judgements pertaining to real estate matters in courts is proof enough of high consumer dissatisfaction levels. Says Justice J D Kapoor, president, State Consumer Dispute Redressal Commission: "Cases relating to deficiency of service, defective construction and non-payment of expenses are filed here quite often. Cases against DLF, Ansals and DDA are some of the more frequent ones. Legal recourse is the best remedy in such cases."    However, none of the developers SundayET spoke to conceded that any of their projects are delayed or there is delay in the possession process. Says Kamal Taneja MD, TDI Group: "There are no delays from our end. If there is, then we try and add some value to the apartment."    But still it seems that the consumer just has the tendency of waiting and not taking any legal route. It is also equally essential to invoke specific clauses in the contract in order to safeguard against malpractices.    "Instead of linking the clause only to interest rates, link it to increase in real estate prices. Cases relating to delayed possession, not as per specifications or location changes come in large majority. Specific courts dealing only will builder disputes may be an answer as the middle class is largely affected by such cases," asserts Mukul Rohatgi, senior advocate, Supreme Court of India. Courtesy:- ET dtd:- July 20, 2008