“Delay in Flat Possession? Claim Compensation under Section 18 by Filing a RERA Complaint”?



The Real Estate (Regulation & Development) Act, 2016 (hereinafter the Act), was passed after an increasing number of real estate developers began delaying the handing over of possession to their homebuyers. The most prominent being the case of Jaypee Group defaulting in handing over of possession on time. Due to lack of specific legislation for dealing with grievances of home-buyers at that point in time, it was the National Consumer Disputes Redressal Forum (the NCDRF) that came to the aid of the home buyers. The NCDRF gave the developers a further time period of 90 days for completing the project. The order also provided that if they failed to do so, they would have to pay Rs. 5000 per flat per day. The decision sent out a very strong message to all the real estate developers and curbed the then prevailing tendency of developers to delay the construction and completion of their projects.

However, one of the loopholes that existed under resolution by the matter by NCDRF was that matters took a long time to be decided because of the huge volume of cases. However, the Act has cured that defect by providing a strict timeline of three months. The adjudicating authority is now bound to dispose of the matter within 90 days. The officer is conferred with all the powers of a district judge in this regard. Gradually the need for a specific law was also felt and it was in pursuance of this that the Act of 2016 was enacted. The new law has cured that defect by providing a strict timeline of three months. The adjudicating authority is now bound to dispose of the matter within 90 days. The officer is conferred with all the powers of a district judge in this regard. It also authorizes the State legislature to notify specific rules for their respective states. Many State legislature has actually exercised this power and notified their respective RERA rules.

Alternatives Available to the Home-Buyers under Section 18

Section 18 of the Act empowers the aggrieved home buyers to either withdraw from the project or wait until the possession is handed. While the first option entitles the home-buyer to claim a refund of the amount already deposited for the project, the second alternative involves payment of interest as per the prescribed rates on a monthly basis until the possession is finally handed.

Where and How to File the Complaint

The complaint is filed under Section 18 before the Real Estate Regulatory Authority of that State, or the Adjudicating Authority as the case may be. Section 31 of the Act expressly states that any person individually, or as a group of aggrieved homebuyers may file the complaint about a violation of any duty under the Act, or rules and regulations framed under it. Since the Act does not expressly provide for any time within which such a complaint must be filed, the ordinary rules of limitation as provided under the Limitation Act, 1963 shall prevail. However, if the rules of a particular State provide for a time limit, that must be complied with.

The complaint must be filed in the format as prescribed under the rules. Though the format differs from state to state, the basic details that are required to be mentioned in such a complaint include the RERA registration number of the project, a brief statement of facts and the remedy claimed by the home-buyer.  The rules also prescribe for interest rates on the compensation, and therefore, based on the provided interest rate, the home-buyer can also calculate the approximate amount of compensation that the developer owes to him or her and include the same within his complaint. This can be calculated only from the date of possession as was promised in the agreement of sale between the developer and the homebuyer.

Online Complaints

This complaint can even be filed online, and the home-buyer in such a case will be required to upload a scanned copy of the documents on which he relies, like the agreement for sale, prospectus/advertisement of the promoter promising handing over of possession by a certain date, etc.

Such a complaint may be made not just on the grounds of delayed possession but also if the home-buyer feels that the flat is not according to the conditions promised in the advertisement or the prospectus of the promoter (developer). Section 12 of the Act provides that if the buyer bought the flat on the basis of a promise made in the prospectus or their prospectus or on the basis of a sample/model flat and the handed over flat is not up to those standards, the home-buyer can file a complaint for compensation.

If the home-buyer is not satisfied with the decision of the Adjudicating officer, he or she may even appeal to the Real Estate Appellate Tribunal.

The Right to compensation exists even when the builder changes the date of Completion

Section 4 of the Act allows the developer to change the date of completion of the project as was initially mentioned while procuring the registration of the project with the Adjudicating Authority. However, in some cases, for example, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has held that even such a change shall not absolve the developer from liability under section 18. This is because the change in the date for completion of the project is only being notified to the adjudicating authority, with no such intimation to the home-buyer. The basis of the complaint under Section 18 is the agreement of sale entered into between the promoter and the home-buyer and not the registration procured by the developer with the adjudicating authority. Therefore, the builder will still be liable to handover the possession on the initially promised date.

Past Trends of the Adjudicating Authority

Though Section 18 expressly provides the home-buyer with two options to choose from, either claiming refund or withdrawing from the project or waiting for the delayed possession in lieu of compensation along with interest for every month of the delay, past decision of the authority have shown a clear inclination toward the second option.It is true that the adjudicating authorities have time and again opined that the home buyers cannot be expected to have invested their money for an infinite amount of time, but, they have also, in certain cases, not allowed the home-buyers to withdraw from the project. This is because, if only a couple of home buyers withdraw from the project and their claim for refund is allowed, that would further adversely affect the completion of project in a short period and would also affect the rights of the rest of the home buyers who have continued to stay with the project. Therefore, in deciding complaints under Section 18, the adjudicating authority provides both parties with an equal opportunity of hearing and then it decides the matter based on what it considers fair and just. This way, the rights of both, the home-buyers as well as that of the developer are secured.

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