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Abdul Azim (Pharmaceutical)     30 July 2009

interest on late payment of amount to builder

Dear All,

I had purchase a house in mumbai in april 2009.  i had paid the builder 25% of the amount and the remaining amount was to be paid by home loan.  But the Bank asked for multiple documents and after submitting the same, finally i got a reply from the bank that the agreement between the builder and the developer is not registered.  the loan can be processed only after registration of the same.  I then applied to another nationalised bank and the loan is now sanctioned.  But the builder is now demanding for the interest on the



Learning

 10 Replies

Raman ( )     31 July 2009

Dear Abdul,



If I were you, I would ask myself the following questions before approaching an Advocate:





  1. What is the agreement between you and the Builder ?

  2. What are the terms and conditions that you have accepted with him ?

  3. Have you tried to explain the builder that the loan officer rejected the loan on a reason that there was no legal agreement between the builder and developer? 

  4. Have you in fact seen/got the above mentioned legal document at/from the Builder?
  5. If not, why have you approached to the other financial institution for loan instead of insisting the builder to obtain the document?
  6. Have you checked with other financial institutions that having this document is a mandatory thing?

 

 

** Normally, one would check all these before getting into legal agreement. Anyhow, there should be a remedy for this ....

Y V Vishweshwar Rao (Advocate )     31 July 2009

In addition to the aobve ,  What is the Rate of interest  agred to  be paid in the Agreemtn between the You and the Builder !

Verify the sadi Clause in the agreement !

 

Y V Vishweshwar Rao (Advocate )     31 July 2009

In the Agreement/s  there will be certainly  a clause for payment of interest for delay payments by purchaers !

jayashree iyer (manager)     06 April 2010

I have a similar problem. I had purchased a flat in Thane. I paid the booking amount for the flat in September 2009. Provisional sanction letter was issued by the bank in Nov. 2009 and finally loan was disbursed only in Feb 2010. Apart from the bank loan amount, there was no delay in payment of margin amount from our end. However, due to delay in disbursal by the bank, I am being charged interest. Also, they are not ready to give me any letter in writing for the charging of interest and want the sum in cash. What is the recourse for me in such a case and am I liable to pay interest for the delay by bank?

Abdul Azim (Pharmaceutical)     07 April 2010

Miss Rajashree,

My case was similar to yours. 

The first thing you have to check, is whether the agreement carries any such clause of interest.  If there is any clause, then what is the rate of interest.

If there is any clause, then the builder will even provide you with a letter giving details about the interest charged.  In your case, he is not providing the same, then there are chances that there is no clause with reference to interest.

Also you have check for any clause relating to days of payment.  if you have not paid the remaining amount by due date, then the builder has total right to cancel the agreement.

In my case, I had sorted out the issue, by negotiating with the accounts people in the office of the builder.  You can try for the same, as these accounting people manipulate a lot of data. So, best of luck

jayashree iyer (manager)     08 April 2010

Thanks for your prompt reply. I checked the agreement. 18% interest on delayed payment is mentioned in the agreement if the amount due is not paid in time. When I discussed with the builder, I was told they are levying interest as mentioned in the MOFA act. However, I could not find any mention of interest levy by the builder on delayed payments in MOFA act. My next question is if the builder is charging interest legally, why should he ask us to make whole payment in cash? Then that means it is his black money. Builder is not ready to give me any official letter of interest payment. How can I counter the arguement?

Pinakin (Deputy Manager)     28 September 2010

I have applied for a Home loan in SBI bank since August 2010. But due to there lethargic attitude it has taken me to the end of September and still my Home Loan hasn't been disbursed. I just called the concern person and he said that the papers are OK and the loan disbursement will still take 15 days. I requested my builder to please bare for some day as the file is in process. But he says that he will charge me 10% interest charges on delay of payment and it will be calculated on no. of days it gets delayed. I read my agreement properly but it does not mention any such clause for late payment or delay in payment. What course of action should i take or how should i counter the arguement. If i refuse to pay such interest what action can he take and how should i reply to him?

VEERA BRAHMAIAH (xxxx)     31 March 2011

Dear Sir,,

I would like to know how the process will be for a foreigner to own a house or Plot in India with his Own Money

Legally. Is there any Opportunity for them to Invest in any other manner.

 

Please Let me know the Details.

harsh aggarwal (consultant)     11 May 2013

Hi 

I am also facing this issue that hdfc bank has taken more than 60 days to sanction my loan but builder agreement asked for payment in 30 days. 

Now, I had applied for home loan through the builder and since it is now delayed, the builder is asking for 18% interest. Is there any way out?

There was no delay from my side. Is there a way to penalise bank for undue delay or to get relief from this interest component?

Thanks

Harsh Aggarwal

akp (engineer)     22 July 2014

I have booked a flat in 2012,the possession date mentioned in Dec 2013. Till now i have not got the possession and paid 95% of the amount.The payment schedule is linked to the construction of slab which is already done. Can the Builder penalise me for late payment when the possession is already 7 months delayed


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