Builder to pay interest on interest paid by homebuyer

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Builder was asked to refund home loan interest that was paid by the buyer, which builder was liable to pay. He was also asked to pay interest on the interest paid by the homebuyer.

By Varun Singh

This story is of a lot of interest for homebuyers, who had booked homes under the subvention scheme.

Subvention schemes are those, where a builder pays interest on the home loan taken by a buyer for a specific period of time.

Homebuyer AA Siddique approached MahaRERA against builders Sandeep Agarwal and Shashikala Agarwal.

The homebuyer had booked a flat in the building Kingston Aura and the agreement of sale was executed in June 2016.

The developer was to hand over the possession by December 2018, but failed to do so. They blamed recession that began in 2016 for the delay.

As there was a delay in possession, the homebuyer were entitled to get interest on their amount paid to the builder under section 18 of RERA.

The homebuyer had booked the flat under subvention scheme. Where the builder was to pay the interest on the loan amount till possession.

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However, it appeared that, the developer paid for the initial three months and thereafter interest was deducted from the buyers account.

B D Kapadnis, Member II of MahaRERA who was hearing the case, pointed out that, the homebuyer is entitled to get refund of the deducted interest amount with interest.

Finally Kapadnis ordered, the developer to pay interest at 9% per annum on the consideration amount paid by the buyer from the date of possession till handing over of the flat.

Kapadnis also ordered, the builder to refund the amount of interest paid by the homebuyer which was payable by them (developers). This amount shall also carry an interest of 9% per annum from its deduction till refund.

The parties were allowed to adjust the claims, also the buyer was permitted to allow the builder to issue the credit note of the amount payable in future.

Adv Prakkash Rohira on this order said, “In my opinion it has been rightly observed by the bench that the interest amount is a credit to the buyers account. A Precedent would be set for troubled home buyers.”

Also Read: Mumbai city’s14,500 dilapidated buildings get relief

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