Introduction

Property disputes are one of the very common features in India. These disputes can come in all shapes and sizes. For example, the landlord and tenant are fighting over the security deposit. Or the business partners who run a 7 crore rupees business and do not have a partnership agreement.

What are Real Estate Disputes?

Real estate disputes are legal conflicts that involve property. These Disputes can involve properties that worth large amount of money and can take a long time resolve.

The reality is that the real estate transactions are complete only by satisfaction of buyers and sellers.

Why disputes occur in Real Estate¹?

Incomplete Information: Not disclosing the facts related to the property by the developer is one of the mains causes of the dispute. In many cases the, the buyers have complaint that crucial information about the property was not known by them at the time of purchase. This may include dues attached to the property which might not be paid by previous owners like, tax or bills.
Land Acquisition: There are numerous issues related to acquisition of land, which causes dispute among the buyers and the sellers. These disputes adversely affect the real estate projects.
Delay in possession:Due to delay in getting several necessary approvals like environment clearance, non-agriculture permits and building permit and many others the construction of projects is often deferred. Residential projects also come to abrupt stop due to shortage of funds. These situation causes postponement of the possession of flats which causes a burden over the people who live in rented houses.
Modification in Layout: Modification in the project leads to conflict among home buyers. According to the existing rules, the modification must be approved by two-third majority of the buyers.
Transparency: The lack of transparency often causes trust issues among the buyers. Unlike other sectors, real estate known for not having readily available information. The buyers may have to struggle a lot to get detailed information about the project approval and documents.
Environmental Concern: With increase in Urbanization, violation of environmental norms has also increased. These violation of environmental can lead to disputes.
Fraud: Fraud has often caused distress in the real estate sector. If the buyers do not thoroughly check the background and goodwill of the contractor, it may lead them to entering on fake promises. There have also been situations like the builder has sold the same flat to multiple buyers.
Brokerage Issues: If the amount of brokerage is not pre-decided or agreed upon by the buyer this may lead o the conflict of non-payment of brokerage to the real estate agent.
Maintenance Issues: A certain amount is to be paid by the residence of the society annually, quarterly or monthly as maintenance charges. Often there are conflicts for owing high maintenance charges or the residence is not satisfied by the maintenance services.

Thus, it is often common for people involved in a real estate dispute to seek different forms of dispute resolution.

How to Resolve Real Estate Disputes?

Litigation

Litigation is no longer an unattractive option of dispute resolution as enacted by Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (Commercial Courts Act) which came into force with effect from 23 October 2015.

The aim of the Commercial Courts Act is to simplify and speed-up the adjudication process with respect to commercial disputes where the value of the disputed subject matter is Rs. 1 crore (Rs. 10 million) or more.

The act provides for –

Constitution of Commercial Courts in all states and Commercial Division and Commercial Appellate Division in the High Courts.
Amendments to the Civil Procedure Code of India to fix timelines for conclusion of the case.

Arbitration

Arbitration is a form of dispute resolution which is used as an efficient, confidential and generally cheaper alternative to litigation, where the perception is that the judicial system has become an unattractive forum for dispute resolution due to inordinate delays². It allows parties to be more flexible and control the process of resolution. Litigation is usually more cost effective as compared to litigation, but the speed is a drawback as it can be time consuming which may turn out to be equally costly.

Expert Determination

This is a mode of dispute resolution that can be used in combination with either Litigation or Arbitration. This mode is ideally suited to variation claims or claims for extra work. It allows expert to decide disputes which arise during the execution of the contract and give a quick and binding decision. The parties can decide by agreement whether the decision of the expert can be challenged in a final dispute resolution process that can either arbitration or litigation.

Conclusion

Thus, the ideal approach to resolve disputes in the real estate would be to have a dispute resolution system in place which is both preventative and adjudicatory in nature and use the following strategies to resolve dispute: avoidance, negotiation, collaboration and adjudication. So, Parties can approach a specialist dispute resolution services organisation, resolution boards, mediation councils or regulators, it should be sufficiently comprehensive in nature and cost effective for addressing different kinds of disputes that may arise and should provide for early intervention and timely redressal.

The system is designed in such a way that it allows the parties the flexibility to the process that works most effectively for them. Thus, making it a lot easier to resolve disputes.