Delay Clause and Penalty

[Mohit Arora]

hi,

As per the Buyer Agreement for my apartment in Phase 1A, there is a clause according to which the builder will pay Rs 5 psqft per month till the time possession is not handed over.In my case, its September' 2011 and I don't think the possession will be handed over till then. So my questions are:

1. What is the time of allotment for Phase 1 owners as per the Buyer's Agreement? July? August? or September only as for Phase 1A?

2. I was told by one of my friends that this clause is really an eye wash. No builder pays this amount and buyers have to pursue to get this and are unsuccessful most of the times. Any idea if this is the case?

Thanks,

Mohit Arora

[Rahul Parmar]

Hi Mohit,

Like yours mine is phase 1A as well (tower 6, unit 604). I received
allotment letter on sept 25, 09. The 27+3 months of delivery is from
date of allotment. So in my case dec 25, 11 is promised delivery with
march 25, 12 being the date with grace period. Builder will pay
penalty only after this period. Well the builder is obliged to make
payment and I know people who bought flat in Unitech Fresco Gurgaon
who being paid penalty every month. You will have to run a bit though.

Rahul

[feroz khan]

Would you be happy even builder is ready to pay Rs.5/sq ft per month? Our fully loaded comes around Rs. 4000/sq ft.
Rs. 5/sq ft.per month (or Rs. 60/per sq. ft. per annum) is just 1.5% per annum of the flat cost.
Builder won't mind paying 1.5% to the buyer every year and divert the funds to other projects.
 
Rgds,
 

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From: moar...@gmail.com
Date: Sat, 9 Jul 2011 08:31:51 +0530
Subject: Delay Clause and Penalty
To: 3c-lotus-...@googlegroups.com

[Mohit Arora]

@ Rahul: Thanks for the clarification. I just checked my agreement again and found that its the same case with me. I was always under the impression that the penalty clause would be valid after Sept' 2011, which, after reading your reply doesnt seem to be the case. Though I couldn't find any mention of grace period. All it says that for the delay of 1-3 month, penalty per month would be Rs 5 psqft.

@ Feroz : Well, I never mentioned I would be 'happy' to receive the penalty instead of the house. Just wanted to know everyone's experience for this penalty clause in case builder delays the possession. Because I did come to know that few builders din't pay up this amount.

Further, I found that as per the agreement, the delay charges will be paid only on-demand. So unless we ask for the amount, builder wont pay it. So, would request everyone to keep this in mind.

Thanks,

Mohit Arora

[feroz khan]

Hi Mohit,
 
I meant that delay in possession will again pinch us more than builder. They are charging interest @18% per annum for delayed payment but in case project is delayed they need to pay 2-3% per annum only (@5 per sq ft.).
 
Rgds,

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From: moar...@gmail.com
Date: Mon, 11 Jul 2011 10:23:02 +0530
Subject: Re: Delay Clause and Penalty

[Shobhit Mittal]

Well! I think we all had read the documents before hand and now there is no point discussing the penalty amount, etc.
Important thing is possession and getting the penalty (if needed...).

And let me tell you that some builders don't pay penalty in cash, they reimburse that in form of wood work, etc. ATS Paradiso is an example of that.

Regards,
Shobhit Mittal