The Tamil Nadu Real Estate Regulatory Authority (TN RERA) directed a developer to compensate a homebuyer for prolonged delays in completing a project, noting that the delay caused significant ‘mental distress’. The regulator ordered the builder to pay ₹3 lakh in compensation to the homebuyer for the hardship caused by the delayed possession.
“The complainants had to undergo considerable mental agony due to the respondent’s failure to complete the project, hand over the property and register the relevant documents on time,” the order said.
“In the result, it is ordered that the respondent should pay a compensation of ₹3,00,000 to the complainants for mental agony, distress and suffering and also ₹50,000 for legal expenses,” the order said.
The case
The homebuyers booked an apartment in the Casagrand Millenia project in July 2022, paying a booking advance of ₹1 lakh. The total cost of the apartment was ₹2.11 crore. They later entered into a sale agreement and construction agreement with the developer in September 2022, with a handover date of June 2023, the order said.
“But contrary to the promise of the respondent to handover the unit by June 2023, the completion and delivery of the apartment was extended to March 2024 instead of December 2023. But till now, the completion and handing over did not happen. In the meantime, the complainants have paid ₹1.92 crore, leaving a balance of ₹17.6 lakh to be paid by the bank. Thus, the respondent had received almost 91% of the sale value of the subject unit,” the order said.
TN RERA noted that in July 2023, the developer issued a termination notice cancelling the allotment, citing overdue payments and stating that it would retain 20% of the booking amount while refunding the balance.
“The complainants had to face a lot of mental agony and distress due to the failure on the part of the respondent by delaying the completion, handing over and registration of relevant documents,” the order said.
Developer refutes claim
The developer told the authority that the complaint was not maintainable and claimed that the buyers had defaulted on scheduled payments.
“The project was properly developed after securing statutory approvals and legal compliance as applicable for the development. The construction agreement was entered into in December 2022, with a sale agreement for the UDS also. The construction agreement clearly states that the apartment would be delivered by December 2023, with a grace period which was acknowledged and signed by the complainants. The complainants continuously defaulted on making the scheduled payments. Still, there is a balance of ₹32.1 lakh payable by the complainants,” the developer said.
RERA order
After examining the agreements, payment records and email communications between the parties, the authority observed that the developer had failed to hand over the apartment within the agreed timeline.
“The respondent had undertaken to complete the construction of the apartment by December 2023, with three-months grace period. So, the undertaking period would expire by March 2024, and the respondent is bound to complete the construction and deliver possession of the apartment to the complainants,” TN RERA said.
“The last three payments were made even before the filing of the counter-statement of the respondent side. It shows that even before 12.03.2025, the date of filing of the counter statement, the complainants had been prompt in making the payments, which is not disclosed by the respondent,” it said.
“The total cost of the subject unit is ₹2.10 crore, and the complainants had already paid ₹1.92 crore even by August 2023, upon availing a home loan only for the purpose of purchasing the apartment. Thus, they have paid more than 91% of the cost of the apartment,” TNRERA said.
There was no evidence showing that the developer issued regular reminders to the buyers regarding the alleged outstanding balance. The authority also observed that it was neither fair nor justified for the developer to retain a substantial portion of the construction cost between 2022 and 2023 and then abruptly issue a termination notice.
“In these circumstances, the delay caused by the respondent is not acceptable and thereby the complainants are entitled to a compensation of ₹3,00,000 towards the mental agony they have sustained due to the delay,” TN RERA said.
A list of questions has been sent to the developer. The story will be updated once a response is received.
