Hyderabad: The Telangana Real Estate Regulatory Authority (TG RERA) has passed a series of orders directing Vasavi group entities to compensate homebuyers for delayed possession in Vasavi Lake City West at Hafeezpet and Vasavi S Urban at Bachupally.
In several complaints, TG RERA directed the payment of 10.70 percent annual interest on amounts paid by buyers until lawful possession is handed over. The interest rate is based on the State Bank of India’s Marginal Cost of Funds Based Lending Rate (SBI MCLR) plus 2%, as prescribed under Telangana RERA rules.
In complaints concerning Vasavi Lake City West, buyers had been promised possession by August 31, 2023, with a six-month grace period. TG RERA held that buyers who continue in the project are entitled to interest from March 1, 2024, until possession is handed over. The accumulated interest must be paid within 60 days, followed by monthly interest payments until handover.
The developer cited Covid-19, litigation and subsequent extensions of the project’s RERA registration. TG RERA rejected these grounds and held that an extension of a project’s registration cannot alter the possession date agreed upon with an individual buyer.
TG RERA also noted that more than 50 complaints had been received against the developer in relation to Vasavi Lake City West and warned that further non-compliance could attract proceedings under Section 63 of the Real Estate (Regulation and Development) Act.
Similar relief was granted in several complaints concerning Vasavi S Urban. Buyers from Blocks 4, 6, 9 and 10 alleged repeated extensions of possession timelines, incomplete works and the imposition of additional charges.
Vasavi Infracon cited Covid-related disruptions, labour shortages, rising material costs and litigation concerning Full Tank Level (FTL) and buffer-zone issues. TG RERA, however, held that agreements executed after the pandemic could not subsequently be defended through retrospective Covid-related force majeure claims.
TG RERA also rejected an additional ₹30,000 debris charge, holding that the charge was not supported by the Agreement of Sale. In complaints concerning changes to lift configurations, TG RERA directed the developer to adhere to sanctioned plans and approvals.
In a complaint concerning Block 9, where construction was affected by proceedings relating to the Komati Kunta water body and FTL issues, TG RERA observed that the promoter is responsible for ensuring legal clearances and conducting proper due diligence before launching a project.
TG RERA held that buyers cannot be expected to investigate title, FTL status or potential litigation before purchasing a flat.
The series of orders establishes that TG RERA did not consider regulatory extensions or project-related difficulties, in the cases concerned, to automatically override contractual possession commitments. The orders directed developers to pay applicable interest until lawful possession is handed over.
TG RERA Orders 10.70 percent Interest in Vasavi Project Delay Cases
