When a builder does not hand over a flat by the date in the agreement, the Real Estate (Regulation and Development) Act, 2016 gives the buyer a clear choice under Section 18.
The two choices
- Stay in the project The buyer receives interest for every month of delay until possession is handed over.
- Withdraw from the project The buyer receives a refund of the amount paid, with interest, without prejudice to any other remedy.
In Haryana, the rate of interest under the state’s RERA rules is linked to the State Bank of India’s marginal cost of lending rate plus two per cent. The same rate applies whether the builder pays the buyer or the buyer pays the builder for late instalments.
What the Supreme Court has said
In Newtech Promoters and Developers v State of UP (2021), the Supreme Court held that the right of a buyer to a refund with interest under Section 18 is unqualified when the builder fails to give possession on time, and does not depend on unforeseen events or court orders that the buyer had no part in. Claims for compensation, as distinct from interest and refund, are decided by the adjudicating officer under Section 71.
RERA or the consumer commission?
In Imperia Structures v Anil Patni (2020), the Supreme Court held that the remedy before a consumer commission remains open to a homebuyer even after RERA. The choice depends on the relief wanted, the amount, and the stage of the project. Where a builder is insolvent, buyers can also claim as financial creditors in insolvency proceedings.
What to gather
- The allotment letter and the builder-buyer agreement, with the promised date of possession.
- Receipts for every payment, and the demand letters.
- Any letters from the builder extending the date, and your replies.
- The project’s RERA registration details.
Complaints in Gurugram are filed before the Haryana Real Estate Regulatory Authority at Gurugram. Our real estate and RERA practice acts for buyers and landowners there and before the consumer commissions.
This article gives general information on the law as it stood when it was written. It is not legal advice; every matter turns on its own facts.