Bought a flat only to rent it out? Then, you are not a consumer | mumbai | Hindustan Times
Today in New Delhi, India
Apr 27, 2017-Thursday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Bought a flat only to rent it out? Then, you are not a consumer

The additional consumer forum for the Mumbai suburban district on Monday held that if a person buys a flat primarily with the intention to rent it out, it shows the purchase was an investment or for commercial purposes.

mumbai Updated: Sep 27, 2014 22:22 IST
Kanchan Chaudhari

If you have bought a flat primarily to let it out, you cannot claim rights as a consumer.

The additional consumer forum for the Mumbai suburban district on Monday held that if a person buys a flat primarily with the intention to rent it out, it shows the purchase was an investment or for commercial purposes. Therefore, such a person cannot be considered a consumer, as envisaged under the Consumer Protection Act.

The complainants in the case, Ashok Tendulkar and his son Yogesh had in January 2007 booked a flat admeasuring 606 sq ft by Rupji Constructions at Andheri. The father-son duo, both residents of the US, had agreed to purchase the flat for Rs51.14 lakh, and had paid nearly the entire amount before the flat was handed over to them.

After taking possession of the flat in June 2008, they approached the consumer forum, alleging that although the developer had agreed to hand over the property by January 2008, the delivery was delayed by five months. Besides, they complained about a few shortcomings in the quality of the flat and the building.

The developer refuted the allegations, claiming the service provider’s relationship with the consumer had come to an end after the flat was handed over to the complainants.

Although the bench of forum president SS Vyavahare and member SV Kalal did not find substance in this objection, it noticed from a letter addressed by the complainants to the developer, that the father-son duo intended to give the flat on rent.

The forum then dismissed the complaint, on grounds that the flat was purchased for investment or commercial purposes, while the Tendulkars continued to reside in USA. Therefore, they were not consumers within the meaning of the Consumer Protection Act.

The definition of a consumer, under section 2 (1) D of the Act, excludes from its purview people who purchase goods for resale or for any commercial purpose. The consumer forum held that the intention to let out the flat on rent amounted to purchase for commercial purposes.

The case
January 2007: Ashok Tendulkar and his son Yogesh book a flat admeasuring 606 sq ft by Rupji Constructions at Andheri. The duo, both residents of the US, agree to purchase the flat for Rs51.14 lakh, and pay nearly the entire amount before it is handed over to them

January 2008: The agreed date for the handover by the developer

June 2008: The actual handover takes place, following which the Tendulkars approach the consumer forum to complain about the five-month delay

What the forum said:
The forum dismissed the complaint, on grounds that the flat was purchased for investment or commercial purposes, while the Tendulkars continued to reside in USA

Therefore, they were not consumers within the purview of the Consumer Protection Act.

Is Your Couch Making You Cough?
Promotional Feature