How is RERA a Better Option for Homebuyers to Seek Legal Action Against Builders for Delay in Possession?

This article analyses the potential help that RERA can provide to homebuyers in case of any dispute that may arise in their home purcahses. The article discusses the complaint mechanism and instances when a complaint can be filed along with the appeal mechanism within RERA and beyond.

Wed Jun 29 2022 | Real Estate, Wills, Probate and Trust | Comments (0)

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It’s been more than 2 years since the Real Estate (Regulation and Development) Act (RERA) got executed and ever since it has been trying to achieve transparency and bring effectual changes in the field of real estate for the welfare of homebuyers. RERA has brought in inspiration for aggrieved homebuyers against erroneous builders.

What are the numerous rights and duties of a homebuyer?

Under Section- 2(d), a buyer is a person who acquires a plot or an apartment through a sale transfer, however, it does not include a tenant of such a plot/ apartment.

Under Section- 20 of RERA, a buyer is entitled to the following:

  • To obtain information relating to sanctioned plans, layout plans along with the specifications, approved by the competent authority and such other information.
  • To obtain information about the stage-wise schedule of the completion of the project which would include electricity, sanitation, water and other amenities.
  • To claim the possession of plot/ apartment. The association of buyers shall be entitled to claim the possession of the common areas.
  • To claim the refund of amount paid along with interest at such rate as may be prescribed and compensation in the manner as under the law.
  • To obtain all relevant documents and the plans of the project, including that of the common areas, after the possession has been transferred.

Duties of the buyer

  • To make required payments, as mentioned in the sale agreement, at the proper time and place, and shall also pay for the registration of the property, taxes to be paid to the Municipality, electricity and water charges, property maintenance charges, ground rent and etc.
  • To pay interest, at such rate as prescribed for any delay in payment. However, the rate of interest can be reduced if it is agreed mutually by both the buyer and builder.
  • To participate in forming an association/ society/ cooperative society.
  • To obtain physical possession within 2 months of the receipt of occupancy certificate.
  • To participate in registration of the conveyance deed of property.

What can a homebuyer do in case of dispute with the builder?

A troubled homebuyer can seek legal help from  RERA which would prescribe punishment or penalty after acknowledging the nature of the default by the builder. Moreover, the buyer can also appeal in the Real Estate Appellate Tribunal if unsatisfied with the decision of RERA. In addition, the buyer can further appeal and challenge the order of the Tribunal  in the High Court within 60 days.

Under Section- 79 of RERA, civil courts are not allowed to entertain disputes in respect of matters which the Authority or the authorized officer or the Tribunal is empowered, under the law, for determination , but National, State or District Consumer Forums will also be authorized to redress buyer-builder disputes.

Section- 71 of RERA allows the buyer to withdraw his complaint from the Consumer Forum regarding complaints under Sections- 12, 14, 18 & 19 and file it with the Authorized Officer under law.

When can a buyer register a complaint against builder under RERA?

A buyer can file a complaint with the RERA Authority for any contravention or violation of the provisions under RERA.

Moreover, a buyer can seek help from expert property lawyers to file a complaint about the following reasons:

  • False advertisement: When a builder displays false or deceptive advertisement, notice or prospectus because of which a buyer ends up depositing a part of the payment with the builder then, a RERA complaint can be filed.
  • Delay in possession: If there has been a delay in the delivery of possession of the property by the builder then the buyer has the absolute right to file a complaint under RERA. The buyer can file the complaint to get instant delivery of possession or get a complete refund of the payment amount already paid to the builder along with the interest.
  • Structural Defects: If there are any structural defects by the workmen of the builder or with the quality of the services then the builder is bound to compensate the amount paid by the buyer.
  • Advance payment: A buyer can pay a cap of 10% of the cost of the property as advance payment. However, if the builder insists for an advance payment more than 10% then the buyer can file a case against the builder in RERA.
  • Unethical registration of a project: It is critical that housing projects are all appropriately registered under RERA, 2016 with the Regulatory Authority. However, if any builder has sold or is even trying to sell an unethically registered project then the buyer can file a RERA complaint.
  • Incomplete details about the project: Each and every detail about the project needs to be updated on the website of the Regulatory Authority. If a buyer witnesses any violation of the same, it  can be challenged under RERA.
  • Transfer & Assignment: A builder cannot transfer majority rights to any third person until and unless a two-thirds majority of the homebuyers are satisfied with it.

How to file a RERA complaint against the builder?

Under Section- 31 of RERA it is stated that any aggrieved buyer may file a complaint directly with the Adjudicating Officer or the Regulatory Authority.

The complaint is to be against the violation of provisions of RERA or any rules and regulations formulated under RERA against:

  • A Builder
  • Promoter
  • Contractor
  • Or even a real estate agent (property dealer)

Any individual who has invested in a property project or has any legal interest in the same can file a complaint under RERA. The procedure to file such a complaint includes the following:

  1. Complete name, address and other relevant details of the buyer
  2. Complete address of the real estate project
  3. Registration number of the property in question
  4. The details and declarations relating to the delay in the property
  5. The reply to the same from the project developer
  6. The relief pleaded from RERA
  • A stipulated fee is to be paid along with the complaint. The fee differs from state to state. There is an existing online procedure for filing a RERA complaint. Different online portals for different states are already in place. For instance, Maharashtra RERA, UP RERA, Delhi RERA etc.

In addition to the above, a buyer can claim compensation from the builder by filing a RERA complaint with the Adjudicating Officer in the same format as above. The complaint must contain extra details sought from the builder relating to:

  • The total amount paid to the buyer,
  • the total compensation
  • the total interest over the said amount.

Under law, the RERA Authority must dispose-off the complaints against builders including delay in possession, within 120 days.

Appeal under RERA

If a buyer is not completely satisfied with the decision of the Adjudicating Officer or the RERA Authority then, an appeal to challenge the same can be filed with the RERA Appellate Tribunal, but within 60 days of the said decision.

Furthermore, an appeal against the RERA Appellate Tribunal’s decision can be filed with the High Court of the state which has the jurisdiction over the area where the property is situated, but within 60 days of the decision.

RERA puts the liability on the builder to deliver the possession of the property within the stipulated time frame. However, if the builder fails to deliver possession within the stipulated time, then he shall have to return the total amount paid by the buyer with the interest at a rate as stated in the contract.

In case, the buyer does not take the money, the builder will be liable to pay monthly interest every month until the possession is delivered.

What are the prescribed penalties under RERA against builders?

RERA lays down the offences, penalties and adjudication relating to homebuyers as well as builders. Sections- 59 to 72 deal with such provisions in detail.

  • Strict punitive provisions such as Section- 59 of RERA deal with a structure of non-compliance or violation of the provisions of:
  1. RERA- The Real Estate (Regulation and Development) Act
  2. Orders of the Tribunal/ High Court
  3. Decisions of the Tribunal/ High Court, or
  4. Directions of the Regulatory Authority
  • Non-registration of a project with the Regulatory Authority by a builder shall result in a penalty enforcement up till 10% of the evaluated cost by the RERA Authority.
  • If the builder doesn't fulfil the same, then the same may result in imprisonment for up to 3 years and the enforcement of a penalty of about 10% of the evaluated cost or both. 
  • In situations where a builder is presenting incorrect information to the RERA Regulatory Authority, it shall then summon a penalty of up to 5% of the evaluated cost of the construction or the total project.

RERA further prescribes certain penal provisions for infringement executed by a real estate agent or an allottee as RERA has a comprehensive approach which include:

  • Violation of the RERA Act can cause an increase in penalty amounting to 5% of the cost of the apartment, land or building. The Regulatory Authority under RERA governs this.
  • Moreover, if any orders/ directions of the Appellate Tribunal are in disagreement then, in that situation, an individual may face imprisonment up to 1 year including a penalty evaluated per day of the determination of the violation. Also, the same can be enhanced up to 10% of the cost of the apartment, land or building on enforcement.
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