Understanding the Real Estate Regulatory Act and Its Jurisdiction
The Real Estate Regulatory Act, 2016, is a landmark legislation in India, designed to regulate the real estate sector, promote transparency, and safeguard consumers. Under this Act:
- Every state and union territory has established a Real Estate Regulatory Authority to enforce RERA rules for homebuyers.
- Builders and real estate agents must operate ethically and transparently.
- Dispute resolution is simplified through a single-window mechanism, allowing homebuyers to seek remedies efficiently.
Section 18 of the RERA Act is particularly important. It allows buyers to demand a refund from builder with interest or seek compensation from builder in cases of delayed possession, defective construction, or misrepresentation.
Common Problems Faced by Homebuyers Due to Builder Fraud & Real estate regulatory act
Despite RERA’s safeguards, homebuyers frequently face challenges:
- Delayed Possession
Builders often fail to deliver projects on the promised date. Buyers then bear the financial burden of paying EMIs and rent simultaneously. For instance, a 2023 MahaRERA case penalised a Mumbai builder for delaying a project by over two years, highlighting the severe financial and emotional impact.
- Misrepresentation of Project Details
Builders may advertise amenities like swimming pools or landscaped gardens but deliver substandard apartments. In a 2022 Delhi case, buyers successfully claimed compensation from builder after discovering false claims about project amenities.
- Non-Refund of Payments
Some developers take advance payments or full amounts and abandon the project, refusing a refund from builder. A 2024 Karnataka RERA ruling exemplified how buyers successfully reclaimed their investments through legal intervention.
These problems underscore the importance of knowing your rights under the Real Estate Regulatory Act.
Legal Remedies Available Under RERA
The Real Estate Regulatory Act empowers homebuyers with multiple remedies:
- Refund from Builder with Interest
Under RERA Act Section 18, if a builder delays possession or abandons a project, buyers can claim a full refund from builder along with interest. Interest is usually calculated at SBI’s highest Marginal Cost of Lending Rate (MCLR) plus 2%.
- Compensation from Builder
Buyers can claim compensation from builder for financial losses and emotional distress caused by delays, misrepresentation, or defective construction. For example, in a 2022 MahaRERA case, a buyer received ₹5 lakh for mental agony due to project delays.
- Ensuring Project Completion
If a project is incomplete, buyers can approach the RERA authority to enforce project completion. Authorities may impose penalties or appoint third parties to finish the work.
- Penalties for Builders
Non-compliant builders face fines up to 10% of the project cost or imprisonment for up to three years, ensuring accountability and deterring fraudulent practices.
Practical Steps for Homebuyers
If you suspect builder fraud, follow these steps:
- Send a Legal Notice
Notify the builder formally, citing the violated RERA section and specifying the remedy sought (refund or compensation). - File a Complaint with RERA
Use your state’s RERA portal (e.g., MahaRERA for Maharashtra) to submit a complaint online, attaching agreements, receipts, and correspondence. Complaints are generally resolved within 60 days. - Seek Legal Assistance
Engage a lawyer specialising in RERA rules for homebuyers. Tigde Law Firm, with expertise in property disputes, can guide you through filing complaints, hearings, and enforcement. - Attend Hearings
Present your case with complete evidence. Legal representation ensures the correct citation of RERA Act Section 18 and maximises the chances of a favorable outcome. - Follow Up on Orders
Ensure builders comply with orders for a refund from builder or compensation from builder. Escalate to civil courts if necessary.
Compliance Tips
- File complaints within one year to avoid delays.
- Ensure your agreement for sale is registered.
- Keep records of all communications with the builder, including emails and letters.
Legal Advice: Things to Avoid
- Don’t Delay Action: Late complaints may weaken your case.
- Avoid Verbal Agreements: Only written agreements are enforceable.
- Don’t Ignore Legal Help: Builder fraud cases are complex; professional guidance is crucial.
Conclusion: Empowering Homebuyers
The Real Estate Regulatory Act has transformed real estate in India, giving homebuyers the power to claim a refund from builder or seek compensation from builder for delays or misrepresentation. By understanding RERA rules for homebuyers, gathering documentation, and seeking expert legal help, you can safeguard your investment and fight builder fraud effectively.
Disclaimer:
This article is for informational purposes only and does not constitute legal advice. Please consult a qualified legal professional for specific guidance.
About Tigde Law Firm
Tigde Law Firm is recognised among the top 10 law firms in India, offering full-service legal expertise in complex areas including EOW, ED, corporate law, property, builder disputes, divorce, civil, commercial, and criminal cases. Headquartered in Thane with offices across Mumbai and Navi Mumbai, Tigde Law Firm serves clients nationwide with a strong team of over 100 lawyers. From local courts to the High Court and Supreme Court, TLF leads with trusted, result-driven advocacy.
Founded by Sachin Subhash Tigde and Shubhash Tigde, both experienced High Court lawyers in Maharashtra with a legacy of over 45 years and second-generation expertise, the firm has handled more than 5,000 cases. With 50+ in-house advocates across Mumbai, Navi Mumbai, and Thane, Tigde Law Firm is widely regarded as the best law firm in Thane and home to some of the most reliable advocates and lawyers in Thane. Specialising in property and redevelopment matters, RERA compliance, society disputes, divorce, NCLT, civil, criminal, corporate, and IP law, TLF delivers clarity and confidence to clients facing complex legal challenges.
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