Big win for home buyers, landowners now responsible

The Supreme Court recently issued a landmark decision that holds builders and property owners liable for construction defects in apartments. This decision is a major victory for home buyers, as it ensures that property owners cannot escape liability for construction defects.

They will now be held responsible for any defects or shortcomings in the building. Disputes concerning construction defects must be properly handled, providing better protection for buyers.

Recently, K-RERAwhich oversees the responsibility of the apartments, ordered repair work to prevent water leaks. Following this, the Supreme Court ruled that the landowners involved in Joint Venture Agreements (JVA) with the builders are also liable for construction defects.

The ruling has given hope to home buyers as landowners often avoided liability until now, leaving it to builders to sort out the issues. As a result, buyers were forced to approach consumer courts. Since the RERA Act came into force in 2016, filing complaints with K-RERA has become a common practice. However, landowners have only accepted their responsibilities under pressure from buyers, with hundreds of cases still pending before K-RERA. The Supreme Court ruling now promises to make it easier to resolve these cases.

What is the essence of the decision?

The two-judge court gave the ruling after hearing a civil appeal filed by Akshay, who was challenging the 2017 order of the National Consumer Disputes Redressal Commission (NCDRC). After hearing arguments from both sides, the court held that “cancellation of the power of attorney between the landowners and the builders in a case of deficiency in service does not relieve the landowners from their joint liability with the builders”. It stressed that even after revocation of the power of attorney, the joint venture agreement between the landowners and the builders remains valid.

The court cited a letter from the landowners in which they revoked the power of attorney, but noted that the phrase “as of now” used in the letter does not absolve the landowners from liability for activities that took place after the termination of the agreement. The court upheld the NCDRC’s decision in a Maharashtra case, holding that the power of attorney, even though withdrawn in 2014, remains in force until its legal conclusion, holding the landowners liable for the actions taken by the builder during that period.

The Supreme Court recently issued a landmark decision, which holds builders and landowners liable for construction defects in apartments. This decision is a major victory for home buyers, as it ensures that landowners cannot escape liability for construction defects. They will now be held liable for any defects or shortcomings in the building. Disputes over construction defects should be handled properly, which provides better protection for buyers.

Recently, K-RERA, the body that monitors liability of buildings, ordered repair work to prevent water leaks. Following this, the Supreme Court ruled that landowners involved in joint venture agreements (JVAs) with builders are also liable for construction defects.

The ruling has given hope to home buyers as landowners often avoided liability until now, leaving it to builders to sort out the issues. As a result, buyers were forced to approach consumer courts. Since the RERA Act came into force in 2016, filing complaints with K-RERA has become a common practice. However, landowners have only accepted their responsibilities under pressure from buyers, with hundreds of cases still pending before K-RERA. The Supreme Court ruling now promises to make it easier to resolve these cases.

What is the essence of the decision?
The two-judge court gave the ruling after hearing a civil appeal filed by Akshay, who was challenging the 2017 order of the National Consumer Disputes Redressal Commission (NCDRC). After hearing arguments from both sides, the court held that “cancellation of the power of attorney between the landowners and the builders in a case of deficiency in service does not relieve the landowners from their joint liability with the builders”. It stressed that even after revocation of the power of attorney, the joint venture agreement between the landowners and the builders remains valid.

The court cited a letter from the landowners in which they revoked the power of attorney, but noted that the phrase “as of now” used in the letter does not absolve the landowners from liability for activities that took place after the termination of the agreement. The court upheld the NCDRC’s decision in a Maharashtra case, holding that the power of attorney, even though withdrawn in 2014, remains in force until its legal conclusion, holding the landowners liable for the actions taken by the builder during that period.

Serious implications
This Supreme Court Decisionwhich states that landowners cannot escape their contractual obligations by unilaterally withdrawing their agreements when the rights of third parties such as home buyers are involved, will have far-reaching consequences for real estate sectorIt was widely appreciated because it underlines the importance of the terms of the agreement and the legal protection offered to consumers.