FIT-OUT POSESSION: BY ER. AVINASH KULKARNI

Saturday Brain Storming Thought (182) 29/07/2023

FIT-OUT POSESSION

A fit-out possession is given by the developers to property buyers generally after the completion of construction and while the occupancy certificate (OC) application is in progress, mainly so that property buyer can begin their interior work and move in once OC is received

Fit-Out Possession does not entitle a home buyer to start living in the apartment

Fit-Out Possession is also known as soft possession

If promoter failed to provide amenities after fit-out possession

1) allottee can move to consumer forum and seek orders to direct promoter to construction of amenities

2) allottee is entitled to get OC from authority, which is responsibility of promoter

3) claim compensation from promoter for deficiency in service

4) case before consumer forum may take 2 years to be disposed of

5) allottee should not stop payment of maintenance

Probable Impact of fit-out possession

1) allottee made a biggest mistake in accepting offer of promoter to take fit out possession

2) allottee have given an opportunity to promoter to escape penalty for delay in delivery of possession

3) Promoter could have offered fit out possession only after receipt of OC

4) in eyes of law allottee have willingly taken possession of his apartment

5) allottee should approach consumer forum at the earliest if promoter has failed to obtain OC preferably within period of one year

Origin of concept of fit-out possession

1) 2 year freeze on real estate projects in Noida by National Green Tribunal over the Okhla Bird Sanctuary issue

2) this issue led Developers to start a peculiar new practice

3) developers offered allotte such fit-out possession of apartment stating that they have applied for OC from Noida Authority

4) meantime, flat allottes can take up temporary possession of their units for the purpose of interiors and fit-outs

5) Developers are making it clear that buyers can shift into their houses only once the lease deeds have been executed

Bait for Buyers in fit-out possession

1) Home buyers are paying every month EMIs and rent at their temporary accomodation

2) Home buyers will jump at the first opportunity to enter their home and get some work done

3) for fit-out possession, allottes first settle their accounts in full and final by making the balance payment

4) fit-out possession letters do not give timeline in which allottes expects to receive the OC from authorities

What can go wrong with Fit-Out Possession offer

1) Home buyers pay 100% for possession that is temporary

2) there may be chance that the project could get rejected by the authority as being deficient in its amenities and service spaces

3) chances of rejection of OC by authorities to developers application

4) your wait for your home gets even longer

5) allottees lost their bargaining power as they have paid all amount

Fit-Out Possession tactic of Promoter

1) Promoter offers fit-out possession who know their projects are not going to get OC earliest

2) Due to lack of OC, promoter could not get certificates from fire, electricity, lift and structural safety

3) Promoter is just buying a time by offering fit-out possession

4) Promoter may gets evade paying penalty as soon as allottes accepts fit-out possession offer

Ground observations for fit-out possession

1) Home buyers reports incidents of theft and eve-teasing as projects without OC usually lack adequate security

2) Normally it is noticed that inner complex is not at all safe for people to enter

3) construction material yet to be cleared and scaffolding still to come off

4) Electricity shafts were open and fire equipment generally missing in the service areas

Fit-Out Possession legality in India

1) The Maharashtra Real Estate Regulatory Authority (MahaRERA) has in a significant order held that possession of flat given for fit out (ie to make interior spaces suitable for occupation) without a Occupancy Certificate (OC) can not be treated as legal possession

2) A homebuyer occupying such fit out possession is not entitled to any relief like interest for every month of delay in project completion, the authority held

Possession of property – Basic checklist

1) Occupancy certificate or Completion certificate to be issued by authority

2) physical inspection of property before accepting property possession

3) Project is complete with all common amenities

4) Delivered what is being promised to be ensured

5) Written communication from promoter about possession

6) Final disbursement at the time of possession to ge given

7) acceptance of Conditional possession of property or under protest