Monday, August 2, 2010

RTI Act / HUDA Act- Builders & Brokers in Haryana Beware

Builders & Brokers in Haryana Beware – RTI Act / HUDA Act



I have had my share of bad luck in buying property – not once but twice. First was an investment in Central Park -2, Sector 48, Gurgoan that has turned out to be the cause of my undoing. Bought that property when the prices were sky rocketing with with the hope that this will be my home some day. But this was not to be as the project has been hopelessely been delayed with no relief in sight. I will disucss this a bit later.

The second investment was in Landmark the Mall, Sector 66, Gurgaon which is a case of bad investing gone worse. The builder and broker first fooled me into investing and now there is no construction in the property at all. The builder has political lineage – he is related to someone belonging to the ruling party. I sold my house to pay installments here. After several mails to the builder, I have stopped writing because there is never from the folks in control. Some junior level guy will write back giving false assurances which obviously never turn out to be true. Nothing more to say, the rest is just they way it always is.

Doing what I do best – I am a lawyer – got down to researching my rights. First, was the Right to Information Act. If the intent of the act is to be believed this can be something as a hope if there is no other way to get information about your investment or the builder, etc. The act provides that each Government department will set up an information cell to provide answers regarding matters that are within its preview. So, for example, HUDA is the authority that gives licenses to a builder (IT park, commercial or residential) and so you will need to file an application with HUDA to get information about anything relating to the project. The application is to be made on a prescribed format available over the Internet along with a demad draft / postal order of Rs. 50. It is advisable to get a blank postal order from your local post office and fill up the name of the relevant person / department when you go to file the application after making due enquiries. The HUDA office is to revert to you within 7-10 days giving the details of costs (towards photocopying, etc.) that you will need to deposit. Thereafter, the information should reach you within 30 days.

Then is the Haryana Development and Regulation Act, 1971 which provides that a builder is to file an application giving detailed information to HUDA for permission to build a commercial or residential project. HUDA, after due enquiry, will issue a license that will be valid for 2 years and thereafter renewed for a further period of one year on payment of prescribed fees. No builder or broker may issue any advertisement or accept any money if prior to grant of license by HUDA. If any person breaches any provision of the act they can be sent to jail. This, however, is easier said than done.

Now as an investor the dilemma is what do you do. There are options but these seem stupidly titled in favour of the builder.

1. You could file a consumer compliant – this will be decided in about 1-2 years and thereafter another 1-2 years will pass if a party appeals. During the pendency of the case before the consumer forum, the builder will suspend all its obligations towards you and this will pressurise you into settling – not a happy state of affairs. If you persist and win, there is very litte that the forum will award and you would have spent more time and energy than you would benefit. NOT WORTH IT.

2. File a criminal complaint – but there is a danger here that the police may not agree to file a complaint or that the builder will get aggressive which is not in your interest, unless you have the clout in the police or the power corridors to take this through. NOT WORTH IT.

3. Sue the borker if the has misguided you or induced you to make booking before a license was granted to the builder. Here, you can both sue the broker before the consumer forum (as his customer) and file a criminal complaint against him for breaching the HDR Act.

THE ADVANTAGE WITH THIS IS THAT THE BROKER IS THE SMALL FISH IN THE BIG POND AND WILL HAVE TO TAKE MEASURES TO ENSURE THAT YOUR INTEREST IS PROTECTED AS HE WOULD HAVE EARNED COMMISSION. IF THE BROKER IS PROSECUTED HE WILL MAKE AMENDS AND SO WILL OTHERS FROM THIS COMMUNITY IF THEY WANT TO STAY OUT OF TROUBLE.

Source: http://curryzone.wordpress.com/2009/09/06/builders-brokers-in-haryana-beware-rti-act-huda-act/

2 Comments »
2 Responses to “Builders & Brokers in Haryana Beware – RTI Act / HUDA Act”

1.
Comment

This is a good analysis. In addition to the options you have mentioned, another workable option is to go to the economic offence wing (EOW). EOW has caught many such fraud builders and your complaint there would definitely put some pressure on the builder to go by the rules.

2.
Comment


I agree but most time there is no ‘fraud’ in the real sense. The builder cannot be called rouge but someone who made bad investment decisions with your money. The EOW will have a tough time sticking a case against someone who will not build or refund. Plus, most time it is the builders manager or some small fry that is front ending the relationship with the investor/ buyer/ flat owner.

Then, is the problem is with getting enough people to support going to the EOW.

But your suggested approach is the best when it does work. The remedy can be fast and extremely effective. The builder will have his tail between his legs in no time coming to the table to sort things out.