CCI attempts to change the builder-buyer equation
The Competition Commission of India (CCI) recently slapped real estate giant DLF with a hefty fine of Rs 630 crore for violation of the Competition Act 2002, and also made modifications in several clauses of the residential property agreements.
The CCI made it clear that no additional construction can be made beyond the approved building plan provided to the buyers.
Open spaces lying within the residential project area not sold will no longer be under the exclusive ownership of the constructer; instead such spaces will be under a joint ownership of the owners of the project.
The Time-of-essence clause, which in contracts enables one party liable in case of the other party defaults in the contractual obligation, will now be pertinent to both parties - the builder and the buyer. Previously, it was skewed in favor of the builder.
The clause that would allow the builder to form the owners' association on the behalf of the owners was also removed.
The modified agreement also specifies that buyers' all payments must be based on construction milestones and not on builders' demand as is the existing practice.
The modifications in the agreement have laid the foundation for the buyers to claim their rights. The move is expected to ensure more transparency.