Real estate disputes are common occurrences in India and can cause significant stress, time, and financial loss to the parties involved. Some of the most common causes of real estate disputes include boundary disputes, title disputes, incomplete construction, fraud, the partition of hereditary property, delay in possession, maintenance and repair issues, rent disputes, encroachment, and transfer of property ownership disputes. These disputes can arise between neighbors, buyers and sellers, landlords and tenants, and family members. It is essential to be aware of the legal procedures and to seek legal help to resolve these disputes efficiently. Let's take a look at some of the common real estate disputes in India:
Dispute over the title
Title over a property means a clear and valid title right to enjoy the benefits of that property, such as possession, use, and income from rent, among others. However, claims on the ownership, missing or inaccurate documents, or disputes regarding the validity of a will or gift can give rise to disputes over the title of the property.
How to avoid/resolve title dispute
To avoid these disputes, one should do a comprehensive review of the property's history and ownership, covering at least the past 30 years, purchase title insurance, conduct a survey, obtain a warranty deed, and work with a real estate attorney.
Delayed possession of a property is a common problem encountered by Indian home buyers. Today, nearly more than 80% of the actual property owners are behind schedule. These delays are caused due to shortage of labor, project assessment mistakes, or objections in getting no objections certificates of sewerage, surroundings, etc.
How to avoid/resolve delayed possession dispute
To legally avoid disputes over delayed possession of a property, a clear and detailed agreement with the seller or landlord that includes a specific date for possession, a clause for compensation in case of delays, and the conditions for termination of the agreement. It is also advisable to document all communication and agreements in writing and to work with a real estate attorney to ensure that the contract is legally binding and enforceable. Moreover, one should ask for a sanctioned plan from the builder before purchasing a property, as this can help you to compare the approved plan with the actual built-up area of the property. If there are any discrepancies between the approved plan and the actual construction, it may indicate illegal construction, which could result in legal issues and disputes.
One of the most common disputes in the real estate environment is rent disputes. These disputes arise when the tenants fail or delay in payments of the rent or the owner fails to return the security deposit to the tenant. To resolve rent disputes, one will have to refer to and understand the rights and obligations of the parties.
How to avoid/resolve rent disputes and delayed payments
To avoid a rental dispute of a property, one should enter into a detailed lease agreement that includes the rent amount, payment terms, security deposit, maintenance responsibilities, and conditions for termination of the lease. It is also important to document all communication and agreements in writing and to conduct a thorough background check of the tenant.
Delayed payment to the housing society by the builder
Disputes over delayed payment to the housing society by the builder can arise when the builder fails to make timely payments to the society as per the agreed-upon terms and conditions. This can lead to financial difficulties for society and cause delays in the completion of the project.
How to avoid/resolve delayed payment to the housing society by the builder
To avoid these situations one should keep track of payments and be aware of the payment schedule agreed upon by the builder and the housing society. One should also include penalties for delayed payments to incentivize the builder to make payments on time. In the event, the dispute is not resolved despite taking preventive steps, one should escalate the matter to the relevant authorities or regulatory bodies. For example, in India, you can approach the Real Estate Regulatory Authority (RERA) for help.
During a real estate transaction, one party may deceptively promote their property and injure another party by suppressing facts regarding the property's condition. These types of transactions lead to fraud and are considered false promises under the real estate section. To avoid legal tangles at a future date, it is of utmost importance and necessary to be extra diligent in the purchase of such property.
How to avoid/resolve disputes over false promises of a property
A thorough check of the property and the seller/developer before making any commitments should be done along with obtaining all commitments made by the seller/developer in writing, and ensuring that they are included in the purchase agreement. Further, one should avoid making any payments or signing any documents until you are completely satisfied with the terms of the purchase agreement.
Causes of disputes
The unorganized nature of the real estate sector in India has led to several challenges, including a lack of transparency, limited access to formal financing options, and the presence of illegal or unethical practices. One of the significant challenges facing the real estate sector in India is the lack of a comprehensive and streamlined regulatory framework.
Another major challenge facing the real estate sector in India is the lack of access to formal financing options. Many potential buyers are unable to secure loans from banks or other financial institutions, which can limit their ability to invest in the sector. This also makes it difficult for developers to secure funding for new projects, which can limit the growth and development of the sector.
The presence of illegal or unethical practices, such as black money transactions and the use of counterfeit documents, is another major challenge facing the real estate sector in India. This can result in the exploitation of vulnerable buyers, and can also harm the reputation of the sector as a whole.
Legal Framework for Real Estate disputes
Real Estate Regulatory Authority (RERA)
The real property (regulation and improvement) Act, 2016 (RERA) is a regulatory frame established to adjust the property sector and to protect the rights of the buyers. The RERA Appellate Tribunal is an appellate court available to the buyers to appeal a decision made via the RERAs. The purpose of RERA is to ensure that each one actual property transactions are transparent, truthful, and in compliance with the regulation, and to offer a brief and powerful mechanism for resolving disputes.
The time frame for resolving disputes varies depending on the specific circumstances of each case. In some cases, the resolution of disputes may take longer due to the complexity of the matter, the volume of evidence, or the need for additional time to consider arguments and submissions. In general, RERA provides for a fast-track dispute resolution process, intending to resolve disputes in a timely and efficient manner.
Negotiation is the most flexible form of dispute resolution, as it is most likely to involve the parties who have an interest in the matter and, where appropriate, their representatives. Parties are free to negotiate according to their wishes, e.g., setting the agenda, choosing the forum for discussion, and determining the members. By ensuring that all parties to the dispute have been consulted as to their willingness to participate and that sufficient safeguards are in place to prevent unfairness in the negotiation process (i.e. an imbalance of power between the parties), the chances of reaching a mutually satisfactory settlement are greater.
The consumer protection Act, of 1986 gives a mechanism for purchasers to are trying to find redressal against unfair exchange practices, faulty goods, or deficiency in offerings. Under the consumer protection Act, a buyer can report a dispute for amounts as much as Rs. 20 lacs at the District discussion board, for amounts between Rs. 20 lacs and Rs. 1 crore at the national fee, and amounts over Rs. 1 crore at the national commission. The benches are empowered to grant relief, including a refund of the charge paid, repayment for mental suffering, litigation expenses, and interest at the refund quantity, among others.
In conclusion, the real estate sector in India plays a crucial role in the country's economy, and despite its unorganized nature, it continues to grow and evolve. Efforts are being made to address the legal and regulatory challenges facing the sector and to create a more transparent and streamlined environment for real estate investors and buyers.