Response

If a deadline is specified in the agreement but no rate of interest is specified, the builder may charge 6% per year simple interest under section 34 of the Code of Civil Procedure, 1908. If no such date has been specified, the builder has no right to seek a penalty if payment is made late.

If there is a delay in payments, the buyer, as an allottee, is responsible for making payments in line with the terms and conditions of the selling agreement. In the instance of any default on the side of the allottee or the promoter, MahaRERA concluded that any party would be entitled to claim interest as provided by the Real Estate Act, 2016.

If the buyer fails to make a timely payment as stipulated in the agreement for sale, he will be charged interest at the rate of Marginal Cost Lending Rate + 2%, as set forth in the Real Estate (Regulation & Development) Act, 2016. The builder, on the other hand, cannot charge the allottee extravagant interest; instead, he must charge the amount specified in the agreement or as a charge under the Code of Civil Procedure, 1908, and the Real Estate (Regulation & Development) Act, 2016.

Reference: Section 18 of the Real Estate(Regulations and Development) Act, 2016 and Section 34 of the Code of Civil Procedure, 1908 – – AHG70 – 202100581 – 35 – 24 – 2021001532021004315413

LAWAYZ-2023-901