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Claim compensation for delay or non-completion of Club Houses/Common facilities promised by builder

Postby webmaster » Sat May 18, 2013 4:50 pm

If the club premises or its facilities have not been handed over to you yet, do not wait. Act immediately

Sanjiv Sinha, a resident of Indirapuram, paid Rs. 1,50,000 for club membership and the same amount as parking charges at the time of booking his flat. He moved into the society three years ago but to date there is no sign of the club or the worldclass facilities — the infinity pool, the gymnasium and the deck — described in the brochure and promised in the sale deed. Dhruv Tuteja has been facing a similar problem for more than two decades now. He moved into a Gurgaon apartment in 1991 and to date there is no club in sight. “The community centre is part of the common area and ought to be handed over to its residents. After all we paid Rs. 50,000 for it. There are a total of 1400 apartments in the complex. This means that the builder at that time collected roughly up to Rs. 7 crore,” he says, adding, “we all feel cheated”. “The construction is yet to begin, forget about the facilities. We fear the facilities have not been readied because the developer does not want to relinquish his rights over the piece of land where the club is expected to come up even though it is part of common areas. This only goes to show that even if you invest in a Rs. 4 crore apartment, you actually own only the doors and the walls and the rest belongs to the builder,” he says.

If you delay your EMI you pay a penalty at the rate of almost 18% whereas the builder pays at the rate of Rs.5 or Rs.10 per sq ft if he delays the delivery of your flat. The same principle should apply for delay in handing over club premises and facilities, he says.

As per a 2010 Supreme Court judgment, clubs are part of common areas and have to be eventually handed over to the buyers as the latter have paid extra for it. No builder can deprive residents of the facilities after possession has been given, says ML Lahoty, a Supreme Court advocate. When an individual buys an apartment, he necessarily buys into a common undivided share of common facilities such as parking, clubs etc. This is where his rights emanate from. He has undivided ownership of the property as money has been collected by the builder for both the club and the parking areas, points out SK Pal, advocate, Supreme Court.

As far as the UP Apartment Act 2010 is concerned, there is one grey area. The development
authority allows for part completion certificates. Thisnmeans that even after completing
three towers, a builder can get partial completion certificate. But it has a rider — even if the builder has completed three towers, he has to complete common areas as they are an integral part of the sale deed and he has charged for them.

Vandana Ramnani
HT Estates 18th May 2013


  • A buyer can seek compensation for delayed delivery of the facility, in this case the club, for which he had paid extra money at the time of booking
  • He can approach the concerned high court or the consumer court saying that the builder had
    promised certain facilities, charged him money for it but failed to provide either the facilities or make alternative arrangements
  • The court can direct the builder to construct the club within a specified period of time and in the meantime, arrange for the buyer to use a nearby club

All about clubs and membership

What does the law say: The Supreme Court verdict in the Nahalchand Laloochand Pvt Ltd versus Panchali Co-operative Housing Society Ltd case of 2010 clearly states that the common undivided area in the group housing society cannot be sold to any individual

What can you do: Write to the concerned development authority, mention the issue and say that the completion certificate has been issued but the club is not yet ready. It can have a criminal liability attached as the builder has taken money and not delivered the facility

The options before you: Ask for compensation. The cost of the club will work out to be even less than 10% of the total price of the house. The other option is to avail of facilities in a nearby club and ask for the amount you spent on using them

Act in time: Remember that courts do not have the jurisdiction to take up a matter which is over five years old. Builders, too, may argue that they have compensated for it by charging the residents less for maintenance

Club charges: A club is an additional facility that attracts an extra charge. The monthly expenditure can be divided among all residents as part of the monthly maintenance charge or a select few willing to pay can become members of a society club
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