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Htnakirs (Prop)     02 November 2012

Legal position of consumer in case of house on rent

Dear Legal Friends,

I entered into an agreement with a builder for a house. The house was delayed by two years. The agreement has a clause about compensation offered by the builder in case of delays, which obviously is not adequate by any standards

I intend to approach Consumer court to claim compensation resulting from loss of revenue as the house was bought as a long term investment for tax purposes, and giving out on rent.

I have the following questions : 

1. I read on the core.nic.in site that if the product is bought for biz purposes, the consumer court cannot be approached because it is for end user /  consumer only. Since I bought the flat for investment / rental purpose, does this disqualify me from approaching the consumer court?

2. I have tried to reason with the builder about the loss suffered, and they are adamant about sticking to the compensation clause in the agreement, so there is no way to avoid litigation. What is the approximate time period and expenditure required to arrive at a conclusion if the civil court is approached? The builder

Thanks in advance.



Learning

 5 Replies

H. S. Thukral (Lawyer)     02 November 2012

It is rather difficult to bypass the clause relating to compensation mentioned in the contract. Though the consumer complaint shall be maintainable because the purchase of residential building can not be termed as commercial purpose,but in my opinion  the clasue of compensation shall prevail. 

1 Like

Htnakirs (Prop)     09 November 2012

Thank you, Thukral Sir,

REgarding the compensation clause : I have gone through the many cases listed at core.nic.in site and find that there are many where the clauses in the agreement were overlooked when the delay is significant. So I am encouraged by this.

In real terms, the rental income loss is 5 times the agreement clause.

Additionally, in my case, I signed the agreement a mere 3 months before the stated delivery date. And this aspect was critical to finalising the purchase, since another flat which would have been ready 4 months later was rejected. COnsidering that the builder finally took 2 more years to actually deliver the flat, there is the issue that the delivery date was intentionally misquoted. This makes the validity of the agreement shaky, in my view. Let me know what you think about this.

I would also be quite grateful if you can give me a rough idea of the expenditure in time and money that I would be required if the builder goes to civil court.

H. S. Thukral (Lawyer)     11 November 2012

The compensation clause is intorduced in the contract as pre-assessed damages in case of breach of contract. The damages so mentioned ( liquidated damages) are the maximum which can be claimed. The indian Contract Act has also provisions for the same. If you have come across judgments where the liquidated damages clause has been overlooked due to extra-ordinary delay, you can take help of the same in your consumer complaint.

Regarding the query about litigation time and expenses; the consumer court remedy is less expensive and a nominal court fee is to be paid as per the compensation claimed. Many complainants are not taking help of advocates in consumer courts. You can avoid the counsel fee by self representation. Time consumed in consumer court varies depending upon various factors but take it as minimum two years now a days.      

rohini swamy (sadsd)     13 May 2013

Dear Sir/ Madam,

I am the owner of a duplex house which has hard marble flooring and western styled bathrooms. This house was given for rent from june 2010 to june 2012, with 5% increase in the rental income, each year. Eventhough, the agreement was made for 11 months with subsequent renewal of such agreement with the agreed increase in rental income, the tenants over stayed in the house for another 10 months, without the renewal of rental agreement. They were very irregular in making the rental payment and some of their cheques bounced, for which we did't take any legal action but coxed them to pay the rent in cash. We had to issue them ,twice, the legal notice to vacate the house.

The tenants have left the house at end of April'13 and have not paid 4 months rent of Rs 15k p.a. We have the security deposit of Rs 1.15Lac out of which we are deducting Rs 60k towards the unpaid rent and the cost painting & damages to the house(not caused by wear & tear). The tenants without getting the written consent from us, have changed high quality fans to low quailty fans. The painting cost & the repairs shall be around Rs 35-40k. Such deductions have also been mentioned clearly in the initial as well as in the subsequent renewed rental agreement. Now, we have planned to return the balance amount to the tenant as and when the actual painting & repair charges have incurred. But the tenants are threatening to sue us in the consumer forum on account of harrassing them & deducting the painting cost from the deposit. 

So, i want to know my position in the consumer forum. Can i get redressal from the forum for being mentally harrased by the tenants?

Addl info- The clause of painting charges & repair for damages are included in the rental agrrement & we have documents relating to the bounced cheques.

Shall be glad to recieve the legal advice.

Thanks in advance

naresh   08 October 2015

Hi Sir/Madam,

Greetings..

I have taken rent house ground floor one month back in bangalore, while taking house, didn't observe the sound pollution which coming from water motor and road side , it is very irritating sound in morning time and night time .

I informed to house owner,. We will vacate house, but they are not ready to give my advance , they are saying if anyone will join, we will give that money..

now they are asking original agreement paper .

Shall I give it to them?

If I give , will they give money back to me or not as per aggreement

Could you please give suggestion how to proceed further


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