Order Name: Sohan Lal Swamy Versus Rajdarbar Assets Limited
Case No.: Complaint No. 2020 of 2023
The Haryana Real Estate Regulatory Authority, with Justice Ashok Sangwan as a member, recently made a significant decision. The Authority deemed it unlawful for a builder to increase the super built-up area of a pre-booked flat without the buyer’s consent. It cancelled the builder’s request for an extra payment from the buyer due to the expansion of the super built-up area.
To put it simply, in real estate, the super built-up area refers to the flat’s actual usable area plus the shared spaces like lobbies, stairways, and facilities, that are equally divided amongst all units in the building.
Here’s a little backstory. The buyer booked a commercial unit in the builder’s upcoming project, Global Foyer. The super area of the unit was 707 sq. ft., costing Rs. 66,63,510 in total. As per the buyer’s agreement clause 17, the builder had to hand over the property within 36 months from the agreement date. Despite the buyer paying Rs. 61,71,805 of the total cost, the builder did not deliver possession in the agreed time.
Three years later, the builder sent a letter to the buyer asking for holding charges, maintenance charges, and threatened a hefty overdue penalty of 18% p.a. The buyer, feeling helpless, sent an email on 22.03.2021, demanding a meeting with the director to discuss the unauthorised more than 10% increase in super area. The builder, however, ignored the repeated requests for explanation about the increased area and the status of the service apartment.
Fed up with the builder’s behaviour, the buyer lodged a complaint with the Authority, asking for interest on the money already paid and the cancellation of the demand letter.
The Authority noticed that the builder got the occupation certificate for the building on 05.04.2018. Later, the builder offered possession of the unit to the buyer through a letter dated 22.01.2019. The letter revealed that the unit’s super area had increased by 167.09 sq. ft., or over 23%, totaling 874.09 sq. ft.
Referring to their past decision in the case of Varun Gupta v/s Emaar MGF Land Ltd. (4031 of 2019), the Authority affirmed that the builder could ask for extra payment for an increase in the super area. However, this was possible only if they provided the buyer with detailed justification before making such a demand. Without proving the increased super area, any demand for extra payment is subject to be cancelled.
Hence, the Authority found the builder’s demand for a higher super area without prior notice and justification to be unlawful. As per the principle that one cannot profit from their own wrong, the Authority cancelled the demand letter. They also directed the builder to pay monthly interest at a rate of 10.85% per annum to the buyer as compensation for the delay.
The takeaway from this judgment is that builders cannot unilaterally increase the super built-up area without proper justification. If they do, they cannot demand extra payment from the buyer. Additionally, if the builder delays the property handover, they are liable to compensate the buyer with interest.
