Short Answer

Yes, RERA can direct the builder to pay penal interest on delayed payments or default.

Detailed Explanation

Section 18 of the Gujarat RERA Act empowers the Real Estate Regulatory Authority to impose penalties on builders for various violations, including delays in project completion or default in payments. The Act mandates that if a builder fails to hand over possession of the property on time or defaults on payments, RERA can order the builder to pay penal interest to the homebuyer. This penal interest is meant to compensate the buyer for the financial losses incurred due to the delay or default.

Furthermore, Rule 18 of the Gujarat RERA Rules provides detailed guidelines on the calculation and imposition of penal interest. It specifies the rate at which penal interest should be charged, the period for which it applies, and the process for enforcing payment. RERA ensures that builders are held accountable for any delays or defaults, thereby protecting the interests of homebuyers and promoting transparency in the real estate sector.

In practice, if a homebuyer files a complaint with RERA regarding delayed possession or default in payments by the builder, RERA will investigate the matter, assess the extent of the delay or default, and determine the appropriate penal interest to be levied. The builder will then be directed to pay the penal interest as per the orders of RERA. Failure to comply with RERA's directives can lead to further penalties and legal consequences for the builder.

Practical Examples

• Scenario 1: Builder X delays handing over possession of a flat to the buyer by six months. The buyer files a complaint with Gujarat RERA, seeking compensation for the delay. RERA investigates the case, orders Builder X to pay penal interest on the outstanding amount for the delayed period, ensuring that the buyer is adequately compensated for the inconvenience caused.

• Scenario 2: Builder Y defaults on the payment schedule mentioned in the sale agreement with the homebuyer. The buyer approaches RERA with a complaint against Builder Y for the default. RERA examines the case, directs Builder Y to pay penal interest on the overdue amount, and ensures that the buyer receives the rightful compensation for the financial loss suffered due to the default.

• Scenario 3: Builder Z repeatedly delays project completion timelines, causing significant financial strain on multiple homebuyers. Gujarat RERA intervenes, imposes penalties on Builder Z for the delays, and mandates the payment of penal interest to all affected buyers, thereby holding the builder accountable for the delays and protecting the interests of the buyers.

References

• Section 18 of the Gujarat RERA Act

• Rule 18 of the Gujarat RERA Rules