Plight of the house buyer
1998 The Star Articles of Law with Bhag Singh
The
signing of a Sale and Purchase Agreement is a happy occasion for most house
buyers as money matters such as the downpayment and loan, would have been
settled or arranged for.
The developer on his part, has nothing to complain about. He has acquired
the land, though he may not have paid for it as yet, and he has enthusiastic
buyers who are willing to pay as much as 10% of the purchase price.
At this stage the buyer has the layout plan and artist's impression of the
land property, and, some technical information. That's all. He has acquired
neither the land nor the building but a dream. He has in fact only bought
the developer's promise.
Ugly scenario
As the building takes shape, everything appears to proceed smoothly. This
is because once the buyer has settled his initial payment, he merely receives
letters informing him of work being completed and the financial institution
granting the loan will release the money. Otherwise only pieces of paper change
hands.
Only when the developer completes the house and the buyer is told that the
Certificate of Fitness is not available does the nightmare start.
By now, however, the developer has obtained what is due to him under the contract.
And it is the buyer who is in the lurch because he has paid for the house
and yet cannot make use of it.
And the longer it takes to get the Certificate of Fitness, the greater the
hardship and the loss that the buyer faces as he has to pay interest on the
loan of an "unproductive asset" which he can neither occupy or let out.
Resolving problem
Usually the developer will blame the authorities for delaying the issuance
of the Certificate of Fitness, while the authorities in turn blame the developer
for not doing things properly.
In desperation, these house buyers will complain to the newspapers and send
copies of their complaints to senior government officers and ministers. Even
when such letters are published, they often do not produce the desired results.
The correct approach would be for the house buyer to assert his rights in
the courts. To do so the buyer must find out who is delaying the issuance
of the Certificate of Fitness.
If the delay happens because the developer has not done a proper job, then
action should be taken against him. In this case the house buyer stands a
good chance of winning the case.
However, a distinction has to be drawn - whether it is a failure to do the
work as specified in the contract or it is defective work in which case the
developer will be called up to rectify or pay compensation in lieu.
Precarious position
If the developer has done all that he is contractually bound to do and ascertains
that the delay is caused by the issuing authority then he cannot be held responsible.
When this is the case, an individual is usually reluctant to sue the authorities.
But even if action is taken. the authorities may resist on the basis that
they are not liable for damages.
In many cases such a contention may be upheld and if this happens the authorities
concerned may continue to be indifferent to the plight of the house buyers.
On many occasions, it has been held that a civil claim cannot be made on account
of a breach of duty by a public servant.
As such the position of the house buyer is even more precarious and an unhappy
one. This may require more than going to court. It may require seeking changes
and improvements in the law through canvassing and lobbying.
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