United Pune Property Buyers Continue Their Fight Against VAT & Builders!

An Agreement to Pay:

5 per cent VAT on flats purchased between June 20, 2006 and March 31, 2010, opened the debate on what is exactly an Agreement to Sell. Which every property buyer signs and registers when he books the underconstruction flat with builder.

Builders claimed that Agreement to Sell is simply an agreement for sale of immovable property. So it doesn't attract VAT.

However, Maharashtra Government considers Agreement to Sell between flat buyer and builder is "Works Contract"- a composite contract for supply of goods & services - and attracts VAT.

But all property buyers know that most of the builders do not offer all services and all goods in their Agreement to Sell.

Mostly, no property buyers can establish their interest in the common areas and facilities in the project - as per the Apartment Ownership Act, 1970. In most of the projects, these common open spaces and amenities remain in the builder's control.

So, in reality, the Agreement to Sell is nothing more than Agreement to Pay.

An agreement signed by the property buyer to pay whenever and whatever money builder demands! Including 5 per cent VAT!!

An Agreement to Surrender:

In reality, when we sign an Agreement to Sell, we surrender ourselves to the builder.

We accept the builders illegal & exorbitant demands. Demands to pay for parking, which as per law, the builder cannot sell. We accept to pay exorbitant charges for the electricity supply, society formation, legal fees, maintenance & all.

Obviously, the builder starts considering that the property buyers are his slaves. The slaves who have no option but to live at his mercy.

An Agreement to Suffer:

After the possession, when the builder does not fulfill his promises advertised in the media & committed in the agreement, the property buyers realize that the Agreement to Sell they have signed is in fact an agreement to suffer. Some blame their destiny and suffer. But many property buyers go to Grahak Panchayat. Consult Mr. Vijay Sagar, Advisor, Builder Related Problems. Under his guidance fight for their rights and win.

Because of the issue of 5 per cent VAT on the flats bought between June 20, 2006 and March 31, 2010, Pune property buyers got an opportunity to unite. As a strategy, all consumer forums appealed to all united Pune property buyers to convert this VAT problem into an opportunity.

An opportunity to force the builder to complete the works.
An opportunity to force the builder to complete his legal duties of society formation & conveyance.
An opportunity to ask the accounts of maintenance, legal, MSEB & other charges.
An opportunity to demand refund with interest of exorbitant charges collected by the builder under different heads.
An opportunity to demand compensation for delayed possession.

Now, the united Pune property buyers are fighting not only for VAT. Now, the united Pune property buyers are fighting for their rights as a consumer.

For these united Pune property buyers, Mr. Vijay Sagar of Grahak Panchayat has prepared a document called - "Notice to Builder for Incomplete Work & Demand for Compensation". Which is a simple format for the all issues property buyers face.

If you are one of those Pune property buyers who is not afraid of his builder and has guts to be assertive and fight for his rights, you will find this document very useful. Have a look, and if you decide to join the fight, feel free to contact Mr. Vijay Sagar for guidance. His contact details are:

Mr. Vijay Sagar, Advisor, Builder Related Problems,

Grahak Panchayat Pune Office
Above Grahak Peth, Opposite S. P. College, Tilak Road,
2020, Sadashiv Peth, Pune - 411030

Every Monday, 6 pm - 7.30 pm

94 22 50 23 15 / vsagar1963@yahoo.co.nz

Notice to Builder for Incomplete Work & Demand for Compensation:

From

Flat purchasers / Society

Address -

To
Developers,

Address

Rep. Through its partners –

1.

2.

3.

Reference – Our earlier meetings and written communication

Sub: Completion of work/provision of amenities as agreed to in Agreement to Sale
executed between you & the members of this Society.

Dear Sirs,

As per the instructions from the members of ______________ Co-op Housing Society Ltd. We are serving this notice upon you for completion of incomplete work and for demand of payment of compensations as mentioned in this notice.

We the members of ______________ Co-op Housing Society Ltd, have booked flats in the scheme called ___________________ The agreements were registered and for that we have paid stamp duty and registration charges. The agreements were registered between ___________and ___________ dates. You have handed over the possession of the flats. In spite of our repeated reminder to you, you have failed to register the Co-operative Society of the members of the Scheme “__________” developed by you. The members have come together and formed a Co-operative Society without your cooperation and the same has been registered as well by the Maharashtra Govt.

2. Refund of Society registration charges and Legal Charges:

The Society is formed by us with our own money and you have already collected money for formation of Society and for legal fees. Hence, you have to refund Rs.__________ per person per head + 18% interest thereon within 15 days from receipt of this notice to each member of this Society.

Or

For Formation of society only Rs 500/- per head is enough as per the Commissioner of Co-op and Akhil Bhartiya Grahak Panchayat Pune whereas you have collected Rs…………….. per head which is very high. Hence you are requested to refund Rs…………… per head with 18% interest.

3. We, the members of this Society have entered into a registered agreement to sale with you individually. You have infringed this agreement. As the agreement is binding on you by virtue of Maharashtra Flat Owners Act, 1963, please note that you are liable to be prosecuted under the said act for infringement of Rule 3(2), Rule 11 & Rule 13 of the said Act.

4. We have complied with all the conditions of agreement to sale but you have failed to provide the required amenities as well as failed to complete the work of the project within the stipulated time mentioned in agreement and as per commencement certificate. You are hereby called upon to complete the incomplete work & other formalities within 30 days of the receipt of this notice.

5. Late Possession Charges :

As per the Agreement to sale, it was binding on you to hand over the possession of the flats on or before __________ but you have failed to complete the work of the building including providing completion certificates of the PMC. You have handed over the possession late by 18 months. The details of claims of all the flat holders are enclosed with this letter as Annexure A. Since you have handed over the possession late, the members have suffered mental agony as well as have suffered financial losses. The members had to pay heavy amounts towards rent for the period you have delayed the handing over of the possession. Besides they have paid Pre-EMI interest on the loan raised through financial institutions/Banks. You are hereby liable to pay the house rent plus Pre-EMI interest amounts we have paid and interest thereon as claimed by the individual members in Annexure A.

6. Refund of Electricity Meter Charges :

As per the agreement, every member of the Society has paid an amount of Rs. ____________/- for the Electricity Meter & Other charges. As you have not provided the electricity meters, you are liable to return the entire amount taken by you from the individual members, along with 18% interest thereon, because we individually have paid to the MSEB for getting new electricity Meters.

7. Electrical Meter wiring charges :

The members have obtained individual electricity connection meters (from MSEB), you have not provided proper wiring and it is lying open. Since the Society has got the work done on its own, an amount of Rs.___________/- has been spent on this job. You are hereby requested to pay the expenditure incurred towards this job within 30 days.

8. Refund of Water Connection and Water Pump Charges:

As per Development Control Rules of PMC, provision for water supply connection was not done by you. The members have contributed for a bore well as well as the electric submersible pumps to this bore well. An amount of Rs._________ /- has been spend for provision of water by the Society. Since the requirement was overlooked by you, you are liable to pay this amount. You are hereby requested to refund amount immediately to the Society. A detailed compensation claim and claim for remaining work of the site is enclosed as Annexure B).

9. Improper / faulty Plumbing Work :

The plumbing work of the building has not been done by you properly as per the Development Control Rules of PMC. The entire plumbing work is faulty. You are hereby asked to complete the plumbing work properly within 15 days of the receipt of this notice otherwise we will remove the fault thereafter and charges will be recovered from you.

10. Standby Motor Pump :

You have not provided standby motor for the sump as per the requirement. This is essential in case of emergency. Hence you are hereby requested to provide one standby electric motor pump for the sump within 15 days otherwise pay the compensation as per Annexure B

11. Provision of Drinking Water Supply :

As per the Development Control Rules of PMC, 135 Liters of water per head or 675 liters of water per day/per flat may be provided by the builder. Since you have failed to provide drinking water connection to the Society, you are hereby asked to provide drinking water facility to the Society within 30 days of the receipt of this notice. If you do not comply with drinking water facility, please note that you are liable to pay compensation charges as claimed in Annexure B.

12. Provision of Lift for building :

As agreed by you in the Agreement to Sale and as per the Development Control Rules of the Corporation and the approved plan, you have not provided lifts to the building. In absence of the lifts, the members are facing innumerable difficulties in their day to day life. As very old persons are staying on 5th and 6th floors of the building and Some residents have even expired because of non provision of lift (blood pressure increased and hence heart failed) If you do not provide lifts to the building within 30 days of the receipt of this notice, you will be liable to pay Rs. _______/- per lift to the society. Also you are liable to pay compensation for the deceased resident due to lack of lift.

13. Provision of Generator Backup :

As agreed by you in Agreement to Sale and as advertised by you through various media, you have not provided any Generator either for lifts or parking lights. In absence of the Generator, the members are facing lot of difficulties and you are responsible for the agony and harassment of the members by not providing generator backup facility to the building. You are hereby requested to provide Generators immediately failing which an amount of Rs. ------/- will be due for you towards this facility as compensation.

14. Provision of painting work :

Neither painting has been done properly nor is the painting work of the entire building completed. You are hereby requested to do the painting work of the building, stairs etc. Failing which you will be liable to pay the compensation amount of Rs. ---------/- for the painting work completion.

15. Water proofing work :

Please note that because of the improper work and in absence of proper waterproofing done, all the flats are leaking and the walls near the stairs become wet. Hence life of the building will be decreased and also it is health hazards to the residents. You are hereby requested to do the waterproofing of the building and If you fail to complete this work you will be liable to pay an amount of Rs.------/- towards this work.

16. Provision of internal roads and gate :

As per the approved plan, the internal roads and the Gate of society have not been built by you. The work is incomplete and half-way through. You are hereby requested to complete the work forthwith within 30 days of the receipt of this notice, failing which an amount of Rs. ----------/- will be due from you on account of this work.

17. Proper tile fitting and leakage of outside water :

The surrounding areas around parking and near the water tank (sump) are left unattended. The outside water is leaking into the water tank. The tiles are needed to be fitted. This work is very essential and the cost towards this work of Rs. -------/- will be due from you.

18. Construction of compound wall :

The Compound Wall has not been built by you as shown in the plan. As there is no security to the society, the hawkers and the thieves could have easy access to the entire premises. You are responsible for damage being caused to the premises by not providing compound wall. You are hereby called upon to construct the work relating to compound wall otherwise you will be liable to pay an amount of Rs. ----------/- towards the cost of the constructions of the compound wall as per plan.

19. Provision of Garden as per advertisement :

As promised and advertised by you, no provision of Garden has been given by you. Some bushes have been planted along side the dirty nallah. This is the biggest fraud committed by you as on the basis of the beautiful garden shown by you, the entire flats were booked by the customers based upon this advertisement. The land remaining along side the nallah is garden as per your definition. You are hereby asked to complete the garden work as advertised by you.

20. Provision of Completion Certificate from PMC :

You have obtained ‘Commencement Certificate’ of the project from the PMC, it was binding on you to complete the construction work within a reasonable time. Since you have failed to complete the work even after five years, you are hereby asked to obtain a ‘Completion Certificate’ of the building immediately by completing the required and essential formalities (Obtaining various NOC of all the department of PMC) and hand over the same to this society. If you fail to comply with this clause of the agreement, you will be liable to pay an amount Rs. --------/- to each flat owner, which may please be noted.

21. Refund of One Time Maintenance Charges :

You have collected One Time Maintenance charges from each member of this society. As mentioned in the ‘Agreement to Sale’ you have collected an amount of Rs.__________/- and Rs. _____________/- respectively from 1BHK and 2BHK flats @ _______ /- per Sq.Ft from each member of this society. You have collected an amount of Rs. _______________ in total, this money has been taken by you illegally, you are hereby directed to return the entire amount of OTM collected by you from all members of this society within 15 days with 18% interest. If you fail to do so, further action for financial irregularities will be taken against you and you will be responsible for all the consequences.

22. Maintenance charges of the building :

As per the agreement, you are not maintaining the buildings. The members are doing all the maintenance activities by contributing among themselves through society. Since you did not from the Society, the members were compelled to come together and from the Society to carry out the daily routine maintenance of the buildings. Therefore, the members are not liable to pay any maintenance charges to you.

23. Refund of Loan taken by you from _________________ Bank LTd and de-mortgaging of property :

You have raised loan from _________________ on the project and the entire property has been mortgaged to this Bank. You are hereby asked to repay all the loan raised from this Bank and get the property card & 7-12 extract cleared within 15 days. Failing which necessary criminal complaints will be lodged against you and cost will be borne by you.

24. Handing of original documents of the building to the society :

You are hereby asked to hand over the following original documents to the Society immediately within 15 days of the receipt of this notice. If you fail to do so, it will be treated as breach of contract entered between the members of this Society and your company and further criminal proceedings against you under Rule 3(2) of the Maharashtra Ownership Act, 1963 (Revised 2008) will be initiated without any further notice.

i. Approved Lay-out plan

ii. Demarcation plan

iii. Drainage lay-out plan

iv. Water line lay out plan

v. Wiring lay out

vi. Original development agreement

vii. Original POA between you and the other owners of the land

viii.Original completion certificate

ix. All N O C’ s from various departments of PMC

x. Approved/sanctioned load from MSEDCL

xi. Original 7-12 extract/Property Card(Original) with free title.

xii. Guarantee/warrantee cards of Lifts/electrical Motors etc.

xiii. Original documents of FSI/TDR issued by PMC

xiv. Conveyance Deed in favor of society :-

25.Conveyance deed :

Under the Maharashtra Flat Ownership Act, 1963 Rule 10(8) it was mandatory for the promoters to form the Society within 4 months from the date of registration of flats by the 60% consumers and complete the conveyance deed in favor of the Society within next four months.

Since you have failed to act in this matter, you have committed breach of Agreement and Maharashtra Ownership Act, Rule 10(8). This breach of agreement on your part is punishable offence under Rule 13 of the said Maharashtra Ownership Act (Revised) 2008 and you are liable for up-to one year imprisonment and fine up-to Rs. --------/-.

You are hereby called upon to explain why action against you under these rules may not be taken against you.

In order to give you one more, last & final opportunity, you are hereby given notice that all the members of this Society have paid stamp duty against the ‘Agreement to Sell’ and further it is mandatory for you to enter into a ‘sale deed’ on required stamp paper with this Society and register the same with the Sub-Registrar, ______________, within 30 days of the receipt of this notice. Any charges required to be paid in this regard to the Government, will be borne by this Society.

If you fail to take necessary action and complete the ‘conveyance deed’ within this period, it will be presume that you are not co-operating in this matter and further action by the members of this society to register the conveyance deed without your cooperation will be taken as per MOFA 1963 (amended 2008). Besides, under Rule 4 sub-rule 13 & Rules 3(2) & 11 of the Maharashtra Ownership Act,1963 (Revised 2008) further criminal & civil proceedings will be initiated against you without any further communication, which may please be noted.

Thanking you,

Yours faithfully,

Encls:

1. Annexure A(individual compensation claims of members)

2. Annexure B (Compensation claim for common amenities & incomplete work)

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