RERA: your rights when a builder delays or cheats you

You booked a flat, paid most of the price, and the possession date has come and gone. Or you got the keys and the walls are cracking. This guide explains what the Real Estate (Regulation and Development) Act, 2016 (RERA) gives you, and exactly how to use it.

What RERA covers

RERA applies to residential and commercial real estate projects. The builder (called the "promoter") must register a project with the state's Real Estate Regulatory Authority before advertising, marketing or selling it, unless the land is 500 square metres or less or the project has eight apartments or fewer Sec 3 RERA. States may set lower thresholds. Projects that were ongoing without a completion certificate when the Act came into force also had to register. Real estate agents must register too.

Each state and union territory has its own RERA authority, rules, fees and online portal. Details such as the interest rate on delay vary by state.

Your key protections

• Full disclosure. Approvals, layout plans, the builder's track record and the completion date must be on the RERA website.
• Carpet area. Flats must be sold on carpet area, the usable floor area inside the walls, not on an inflated "super area".
• Separate bank account. 70% of the money collected from buyers must be kept in a separate account and used only for land and construction of that project Sec 4 RERA.
• Advance limit. The builder cannot take more than 10% of the cost as advance or application fee without first signing a registered agreement for sale Sec 13 RERA.
• No changes without consent. Sanctioned plans and specifications cannot be altered without your consent. Major changes to the building need the consent of two-thirds of buyers Sec 14 RERA.
• Structural defects. If you notice a structural defect or poor workmanship within five years of possession, the builder must fix it free within 30 days. If not, you are entitled to compensation Sec 14(3) RERA.
• Society and documents. The builder must help form the buyers' association and hand over common areas and documents Sec 11 and 17 RERA. You are entitled to information about the project's stage and approvals Sec 19 RERA.

If possession is delayed

If the builder fails to give possession by the date in the agreement, Sec 18(1) RERA gives you a choice:

1. Withdraw: get back all the money you paid, with interest at the rate in your state's rules, plus compensation; or
2. Stay: continue in the project and receive interest for every month of delay until you get possession.

In Newtech Promoters and Developers v State of UP (2021), the Supreme Court held that the buyer's right to a refund with interest on delay is unqualified. It does not depend on the builder's reasons for the delay, such as unforeseen events or court stay orders, as long as the delay is not the buyer's fault.

Before deciding, think about where the project actually stands. If it is nearly finished, staying and claiming delay interest may make sense. If work has stopped for years, a refund order is usually the safer choice.

Step by step: filing a RERA complaint

1. Gather documents (see the list below) and make a simple payment table: date, amount, receipt number.
2. Send a written notice to the builder by email and registered post, stating the problem, the agreed date and your demand (refund with interest, or delay interest, or repair). Give a deadline, say 15 days.
3. File online on your state RERA portal against the builder or agent for any breach of the Act Sec 31 RERA. Fill in the project registration number, attach documents, and pay the fee (it varies by state, usually a modest amount). Some states have a separate form for a compensation claim.
4. Attend hearings, often online. The authority can order a refund, interest, completion or repair. Claims for compensation are decided by the adjudicating officer Sec 71 RERA.
5. Recovery. If the builder does not pay, apply for execution. The authority can recover the amount as arrears of land revenue through the district administration.
6. Appeal if needed. Either side can appeal to the state's Real Estate Appellate Tribunal, generally within 60 days. A builder who appeals must first deposit a share of the amount ordered.

Other routes

You may also approach the Consumer Commission instead of RERA; the Supreme Court has held that the two remedies are alternatives and you may choose. The Supreme Court has also held that homebuyers are financial creditors who can start insolvency proceedings against a defaulting builder, subject to conditions such as a minimum number of buyers joining. Which route suits you depends on the project and the builder's finances, so take advice.