Builder asking for extra charges in final demand, what to do?

Following are the surprise/extra charges being asked for in the region at the time of possession. We discuss what are they and what can possibly be done to deal with them:

Water and sewer charges at 15k to 20k:
UP Apartment act clearly states “The promoter shall pay all local taxes including house tax, water tax, sewer tax, until and unless subleases have been executed in favour of the apartment owners”.
So, unless and untill this is specifically mentioned in your BBA, this burden can not be passed to buyer before sub lease is executed.

Labour cess at 19 to 22 psf:
We have discussed Labour cess at length previously.
Labour cess has to be charged at 1% of construction cost equally distributed among all units. This is paid to local labour department.
The transfer of this burden is debatable.

The Aster Public school

Sponsored

Dual electricity meter charges at 20k to 30k:
Has to be borne by the buyer.
However, this being pretty standard can very well be mentioned as part of Builder buyer agreement (BBA). Builder, however, to make the deal sound reasonable, do not mention this explicitly in BBA.

Advance maintenance charges (AMC) for 3 months to 2 year at 1.8 to 2.5 psf:
This is different from IFMS.
This is the amount which is utilized for maintenance till an owners association is formed.
This has to be paid but the declaration deed (as per UP Apartment act) has to specifically mention the tentative maintenance charges at time of handover.

Interest to buyer @ 18% or 24%:
This interest on delayed payment by buyer is seen to catch the buyer unaware.
Most of the interest is either due to delay from bank or due to some approval delay due to which buyer holds back the payment.
For settlement at time of possession, ensure you keep all communications with builder regarding reason for holding back payment intact.
If you see in a practical way, interest due to delay from bank will practically be (per annum interest for delay e.g. 18% – home loan interest %) i.e. around 6% to 8%. Hence, that burden is still bearable provided its legible.

Additional charges like Communication system, Gas pipeline set up, sinking fund etc:
This amounts to another 10k to 25k.
If these facilities are mentioned as part of specs, the same shall not be charged and court has given rulings against invoking such charges.
Sinking fund is just another way of asking maintenance over and above the AMC.
Before you pay, get a list of things that builder plans to implement over and above promised amenities and facilities under this.

VAT @ approx 4%:
In Faridabad and Gurgaon and few other states in the country, builders are demanding VAT as well. However, since there is a court stay on collection (for concluding the exact applicable VAT), builders are demanding bank guarantee instead.

Escalation charges:
Consumer courts have given judgments against charging of escalation cost as the delay is never due to buyer. This is the case even if such one sided clause that talk of escalation cost exist in BBA.

Farmer compensation/Increased land cost charges:
This has to be necessarily routed through court as builders will try their best to transfer this to buyers.

Comments/Feedback invited.

Last updated: May 22, 2015 at 15:58 pm

11
Leave a Reply

avatar
5 Comment threads
6 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
5 Comment authors
Ankur TyagiDharmendra SrivastavaSKGo4Reviewsbalbir singh Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
Ankur Tyagi
Guest
Ankur Tyagi

Hi, During the purchase time, my builder offered me all inclusive deal of 30 lakhs, now they during possession they are claiming- Dual meter charge, electricity connection 4KW charge, IFMS, Labour cess, Metro cess, solar water heater charge. Further on, out of 14 towers they have build only 4 towers and without developing park/gym/club house and other aminities they are offering me possession. Can they offer possession even when the work is going on in the adjuscent towers? And can they claim above mentioned charges even when they have signed all inclusive deal. Although in agreement they have mentioned that… Read more »

Dharmendra Srivastava
Guest
Dharmendra Srivastava

Hi
My builder in noida sector 77 sent demand with which was not applicable at all. I sent mail asking for clarification also but they kept on saying nothing extra. Now they say that they have sold my flat to someone else. Despite I have paid 100 percent cost. Only ifms, registration was pending and so called penalty. Please advise not allowing to take possession and pressurising me to buy bugger flat.

SK
Guest
SK

Could you please share the ruling or please provide link for Escalation charges and Farmer’s compensation charges
I am facing such agreement clause. How it can be challenged when the agreement is already signed.

balbir singh
Guest
balbir singh

waiting for update sir

balbir singh
Guest
balbir singh

In BBA, the builder keeps the provision of charging hafty interest rate – 18 to 24%-in case there is delay in making payment. On the other side, minimum charges -@ Rs 5/- or so per sft is kept for paying by the builder for delay in completion. Is it correct to charge heavily in case of delay from buyer & pay minimal for the delay on builder part. is this type of anomly ok? Pl have your views on this.

Copyright © 2019 go4reviews.in. All Rights Reserved. 

%d bloggers like this: