Flooded Basement Unit: Court Defines Consumer Rights in Property Sale.
11 June 2024
Consumer Protection Act >> Consumer Rights
A recent consumer court case in India highlights the risks associated with purchasing basement properties. The buyer (complainant) successfully argued that the seller (OPs) misrepresented the unit and failed to disclose potential flooding issues.
The Case:
The complainant purchased a small unit (550 sq.ft.) in an apartment complex called "Lake Ridge" for Rs. 16,85,000. Soon after, heavy rains caused flooding in the basement area, rendering the unit unusable. The buyer claimed the OPs never mentioned the flooding risk and the property was unfit for habitation. They sought a full refund of the purchase price.
Seller's Defense:
The OPs argued that the complainant rented out the unit to a food court, so they couldn't claim any loss of use. Additionally, they pointed out the time gap between the sale (2015) and the complaint (2018), suggesting the buyer exceeded the limitation period. They further argued that the buyer wasn't a "consumer" under the Consumer Protection Act as the property was purchased for commercial purposes (rental income). Finally, they denied any deficiency in service and claimed the unit was handed over in good condition in 2015.
Court's Decision:
The State Commission acknowledged that the complainant profited by renting the unit before the flooding. Therefore, they were not awarded interest on the purchase amount. However, the commission ruled that the OPs were liable for selling a faulty property. The complainant received Rs. 9,90,000 (excluding interest) and Rs. 50,000 as compensation and costs. The buyer was also directed to relinquish ownership rights to the flooded unit.