In this blog post, Sunidhi Pubreja, a student of Rajiv Gandhi National University of Law, Patiala has written a comprehensive guide to filing a complaint in CREDAI and further explained the key points that need to be kept in mind by the complainant while filing such complaints.

Introduction

Thinking about investing your savings in real estate and the most common advice you will get from experts is to be diligent while choosing a builder. Being diligent means taking notice of builder’s previous work, quality of service provided by him/her, compliance with the plan, etc. This industry is plagued with fraudulent builders. So, the buyer needs to be cautious, and it is wise to invest with a builder who is registered with a credible governing body such as CREDAI.

What Is CREDAI?

CREDAI stands for Confederation of Real Estate Developers’ Associations of India. CREDAI is a regulatory body of builders developed to administer the working and dealing of builders and to control the increasing number of fraudulent builders in this industry. It works to promote the interest of builders as well as investors and to bring transparency in the dealings between the two.

CREDAI seeks to create a favorable policy climate to ensure housing for all. CREDAI specially articulates the concerns of private housing providers. To generate confidence in this industry CREDAI has set a code of conduct and it is mandatory for all the members to abide by it. For example, consistent agreement clauses for all the investors, launch of projects only after securing all the approvals, detailed area statements of the saleable item, etc.

Malpractices Of Builders

The builders, too, earn huge amount of profit befool the buyers. The builders indulge in such malpractices whose consequences are faced by buyers. For example, DLF was served with a public notice by Bangalore City Corporation, Bruhat Bangalore MahanagaraPalike (BBMP), regarding for not obtaining necessary clearance approvals such as environment, power, etc. Its major impact was on those buyers who had already invested their money in it. The authorities stated that such flats would not get No Objection Certificate (NOC) as the necessary clearance has not been obtained, so it is illegal to start construction for the same. Hence, it bars the buyers from completing other transaction with civic authorities.

The builders promise to complete the construction on time, but they delay the construction without any genuine reason just to charge extra-exorbitant amount of money from buyers. They even misrepresent the facts, they may not provide agreed quality of products for construction, or indulge in any other fraudulent activity. Once the construction starts and the builders start demanding the exorbitant amount of money the buyers feels stuck in it.

However many times, despite our best efforts we feel deceived by our builders. What does one do in that case? The buyers have recourse to file a complaint against the builder if they feel cheated by their builders. First, the buyers can warn the builder about his/her malpractices. If the builder still does not stop his corrupt activities, then the buyer can approach the governing body if the builder is registered with a governing body. If the buyer is still not satisfied, then he can file a civil or criminal suit depending upon the nature of the complaint. There is no hierarchy in this chain.

How To File A Complaint Against a Builder?

To redress your grievances you can directly approach the builder. Nowadays, the rule of Caveat Venditor is prevalent in the market so most of the builders are customer oriented and would gladly oblige the customer or offer compensation if required.

1. The preliminary action against the buyer is to write to grievance cell of the company of the builder for redressal of his/her grievance.
2. If the developer is a member of CREDAI and he/she is not obliging, the complaint can be taken up with the CREDAI Chapter in the city having the Consumer Grievance Redressal Forum to resolve the issue.

CREDAI has established a Consumer Grievance Redressal Forum where an aggrieved buyer can register a complaint against CREDAI member developer. By translating investor interest protection into a mechanism, the apex body of real estate developers resolves consumer complaints expeditiously and prompts bestselling practice amongst the developer fraternity. The mechanism consists of the respective developer downloading the complaint lodged by the buyer from the website and informing the number of days that will be needed for resolution of the complaint. The period to resolve complaints ranges from 7 to 45 days depending on the nature of the complaint. To reduce the incidence of complaints, the developers are encouraged to adopt standard procedures, protect buyer’s interest and embrace transparent practices.[1]

To keep the resolution process free from internal influences, a provision has been made for experienced Legal and Technical Experts of developers to facilitate such resolutions. So far, Consumer Redressal Forum has registered approximately 1265 complaints and effectively resolved 1119 cases (as in June 2014). Out of the remaining 146 cases, 115 are in the process of being resolved. The above figure shows that CREDAI NCR has already resolved around 90% cases. The success rate shows that general customer is gaining confidence in Consumer Grievance Forum of CREDAI NCR.[2]

Guidelines to be remembered before filing a complaint with CREDAI

• CGRF functions neither as quasi-judicial nor as an arbitrator but only as a mediator.
• The Secretariat of Association can only register the complaint against a member builder only.
• The processing fee for filing a complaint is Rs 2000/- and in no case, more money can be demanded. In case the builder is found guilty at then, he is obliged to pay this amount.
• Once the grievance has been resolved by CGRF, it shall not be entertained again on a complaint from same parties.
• If the verdict of CRGF goes against the member, then he is obliged to comply with it. But if he does not comply with it CREDAI can then cancel his/her membership and expel him/her.
• If the matter is sub judice and both the parties agree to resolve the issue through CRGF, then CRGF will take cognizance of the offense. Otherwise, it has no jurisdiction to take the matter.

The Procedure to file a complaint with CREDAI

• You can file a complaint against the builder online at http://credai.org/register-your-complaint. Once the complaint is received by them, a serial number is allotted to it and sent to the member against whom it is filed.
• After the complaint has been sent to the respective member, he is required to send a reply within a stipulated time from the date it was received by him/her. If the builder fails to reply then, the buyer has to report the same to the Grievance Committee for required action. And the committee sends the message of the builder to the complainant, and he has to reply within seven bank working days.
• If the committee feels necessary, then it can also order its members to carry out the inspection at the site to resolve the issue.
• If the complainant is not satisfied with the reply of the buyer, then it has to inform the committee. Then the committee will call both the parties together and tries to resolve the matter with a mutually acceptable order and end the matter.

3. CREDAI is a national-level governing body. There are many other local levels governing bodies as well which can help a buyer to resolve the grievance if the builder is a member of that local level body. For example, Ahmedabad Realtors Association (ARA), Bangalore Realtors Association India (BRAI), Coimbatore Association of Realtors (COREAA), Andhra Pradesh Realtors Association (APRA), Realtors and Estate Consultants Association of Kolkata (RECA), South Metro City Association of Realtors (SMART), Association of Real Estate Consultants -Nasik (ARC), Real Estate Agents Association of Rajkot (REAAR), etc. are branches of National Association of Realtors-India (NAR). NAR India is a registered non-profit society registered in 2007 and is an umbrella organization covering real estate associations in India.
4. The buyers who bought property with a builder who is not a registered with CREDAI builders can approach the National Consumer Helpline (1800-11-4000) and CORE (http://core.nic.in/Complainant/CRegistration.aspx). These two help lines take care of all the complaints of a consumer and provide a remedy to them against unscrupulous activities of the seller.

• National Consumer Helpline aims to provide telephonic advice, information and guidance to empower Indian consumers and persuade businesses to reorient their policy and management systems to address consumer concerns and grievances adopting world class standards.[3]
• Core Centre aims to work in close cooperation with all the stakeholders in protecting consumer interests by providing state-of-art infrastructure for consumer’s grievances redressal, training, research, and class action litigation having necessary resources.[4]

So, these two forums help you redress your complaint if you fail to register your complaint because the builder is not the member of CREDAI or any other governing body.

5. The buyer also has recourse to file a complaint against the unscrupulous activities of the builders before the Competition Commission of India. Competition Commission of India (CCI) has the power to enquire anti-competitive and unambitious practices and impose rigorous sanctions on the delinquent builder. A fully functional committee with a Chairperson and six members appointed by the Parliament, the Commission, works towards protecting the rights of the consumers.
6. The last resort, if the consumer is still not satisfied, is that he/she can then approach the consumer/ civil/ criminal court depending upon the nature of the complaint and take a legal action against the defaulting builder. He/she can even claim damages for the amount of interest he could have earned if he/she had invested the money somewhere else or any other damages incurred by the buyer due to fraudulent practices of the builder. Depending upon the facts of the case if the judges are convinced that the buyer has incurred some real damages the court may award special damages or punitive or non-compensatory damages (These damages are not awarded in order to compensate the plaintiff, but in order to reform or deter the defendant and similar persons from pursuing a course of action such as that which damaged the plaintiff).

So, next time if a builder has befooled you or your known ones beware of the mechanism to file a complaint against the defaulters and get an appropriate remedy.

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Footnotes:

[1]Available at http://credai.org/cgrf, last accessed on July 5, 201 at 1:50 p.m.

[2]Ibid.

[3]Available at http://www.nationalconsumerhelpline.in/, last assessed on July 5, 2016, at 3:26 p.m.

[4]Available at http://www.cccindia.co/corecentre/guest/aboutus.asp, last assessed on July 5, 3:28 p.m.