Legal Remedies available to a Homebuyer under the Real Estate (Regulation and Development) RERA Act, 2016
The real estate industry has been a serious affair for people who search for a risk-free investment. The real estate (Regulation and Development) RERA Act, 2016 addresses various grievances and tries to bring transparency in the real estate industry. The act has thus prescribed for the formation of the Real Estate Regulatory Authority in each state for promoting the interest of the buyers and to resolve their grievances. Any aggrieved homebuyer can file a complaint with the respective state regulatory authority for any violation under the Real Estate (Regulation and Development) RERA Act.
Following are the legal remedies available to the homebuyers in case of -:
1) A Delay in Possession [Section 18]
In case there is a delay in possession of the real estate project by the promoter/builder, section 18 of the Act, gives the aggrieved person the remedy to:
• either terminate the agreement and a seek refund from the promoter or builder. In such a case, the promoter shall be liable to return the whole amount paid by the homebuyer with applicable interest.
• continue with the agreement and claim compensation from the builder or promoter for each month of delay till the possession of the property is given.
What constitutes a delayed possession depends upon the facts of the case. For instance, in Kolkata West International City Pvt Ltd vs. Devasis Rudra [Civil Appeal No. 3182 of 2019], there was a delay in possession for seven years. Following were the observations made by the Hon’ble Supreme Court of India:
- that it would be strikingly unreasonable to interpret the contract between the parties as necessitating the buyer to wait forever for possession of a flat.
- that a buyer can be expected to wait for possession for a reasonable period, however, a period of seven years is beyond reasonable.
Rule 16 of the Uttar Pradesh Real Estate (Regulation and Development) Rules 2016, prescribes for the payment of compensation/refund with applicable interest within 45 days from the date of which such compensation/refund becomes due. The aggrieved person shall file a complaint with the adjudicating officer as per ‘Form N’ along with a fee of one thousand rupees in the form of a demand draft (DD) drawn on a nationalized bank in favour of the regulatory authority to seek refund/compensation from the builder.
2) Structural Defects and Poor Quality of Construction [Section 14(3)]
According to section 14(3) of the Act, in case of any structural defect or poor quality of construction, the allottee can notify the builder/promoter about the same within a period of five years from the date of getting possession over the said property. Upon receiving such notice, it is the liability and duty of the promoter/builder to rectify such defects without any extra charge within 30 days.
In the event where the promoter fails to do so, the allottee is entitled to compensation by the promoter/builder by filing a complaint with the adjudicating officer as per ‘Form N’ along with one thousand rupees complaint fee in the form of a demand draft.
3) Remedies for Abandoned/Stalled Projects [Section 7 & 8]
The home buyer’s rights have been secured by UPRERA in case the builder/promoter abandons the construction of the real estate project. Upon receiving a complaint regarding the issue, the Regulatory authority shall take actions against the builder under section 7 which prescribes for revocation of the registration and debarment of the promoter to access the RERA website in relation to the disputed project. The Authority shall also direct the bank holding the accounts for the concerned project to freeze all accounts that are related to the project. A complaint shall be filed against the builder under section 31 of the Act.
Section 8 ensures that the interests of buyers are not affected by imposing an obligation on the Real Estate Authority to transfer the abandoned projects to a competent authority after consulting with the State Government.
4) Remedies available against the Builder/Promoter for the violation of any provisions or infringements of the Real Estate (Regulation and Development) Act, 2016 [Section 31]
Promotion of real estate projects without getting it registered from the state’s Regulatory Authority, False advertisements of real estate projects, Non-adherence to the sanctioned plan for construction, Non-delivery of Commencement Certificate, Completion Certificate, and Occupation Certificate (OC) to the allottee, Starting construction without getting suitable governmental permissions, Refusal to accept cancellation booking, Hidden charges, One sided agreements and other Unfair trade practices are some common issues and grievances that are faced by home buyers from time to time.
One sided agreement often leads to unhappy and unsatisfied buyers, giving buyers no choice but to abide by the agreement. In Pioneer Urban Land and Infrastructure Ltd vs. Govindan Raghavan, [Civil Appeal No. 12238 OF 2018] the Apex Court observed:
- A contract shall not be final and binding on the buyer if it is shown that the buyer had no option but to sign the contract which was framed by the buyer.
- Such incorporation of one-sided and biased clauses in an agreement constitutes an unfair trade practice as per section 2(r) of the Consumer Protection Act,1986.
The Real Estate (Regulation and Development) Act, 2016 enables the aggrieved home buyers to file a complaint under section 31 of the Act in case the builder/promoter fails to perform his obligations listed under the Act. Any aggrieved person can approach the Authority or Adjudicating Officer, as the case may be, and file a complaint by submitting ‘FORM M’ along with a fee of rupees one thousand in the form of a demand draft (DD). The aggrieved person can also claim compensation from the promoter/builder by submitting ‘FORM N’, however, the amount of compensation which shall be awarded will be decided by the adjudicating officer after examining the facts of the complaint.
5) Remedies available against the order of Authority or Adjudicating officer [Section 44 (1)]
According to section 44(1) of the Real Estate (Regulation and Development) RERA Act, 2016, in case a home buyer is not satisfied with the direction/decision/order passed by the Authority or the adjudicating officer, he can appeal to the Uttar Pradesh Real Estate Appellate Tribunal. Every appeal shall be filed within sixty days from the date on which the copy of the direction/order/decision is received by the aggrieved person.
According to rule 25-(2) of The Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016, such an appeal shall be filed as per ‘FORM L’ along with a fee of one thousand rupees in the favour of the Appellate Tribunal.
The following are the required documents for filing an appeal in the Appellate Tribunal:
• An attested true copy of the order against which the relief is sought.
• Copies of all the documents to support the appeal.
• An index of all documents.
6) Appeal to High Court [Section 58(1)]
If any person is aggrieved by the decision/order passed by the Appellate Tribunal, he can file an appeal to the High Court. Such appeal shall be filed within sixty days from the date on which the copy of the direction/order/decision is received by the aggrieved person, on any grounds as mentioned in section 100 of the (CPC) Code of Civil Procedure (1908).
7) Additional remedies under Consumer Disputes Redressal Forum/ Consumer Disputes Redressal Commission/National Consumer Disputes Redressal Commission
Section 79 of the Act denies jurisdiction to civil courts for matters that concern the adjudication of power of the Regulatory Authority, adjudicating officer or the Appellate Tribunal. However, an aggrieved person can also avail remedies under the Consumer Protection Act, 1986 and the Insolvency and Bankruptcy Code, 2016. In Pioneer Urban Land & Infrastructure Ltd & Anr vs. Union of India [Writ Petition (Civil) No 43 of 2019] the Supreme Court held that the remedies provided to allottees of flats are concurrent and thus, can avail remedies under the aforesaid acts.
The Real Estate (Regulation and Development) Act,2016 prescribes a number of remedies to the home buyers (allottee) that are aggrieved by the conduct of the builder or promoter. The Act acts as a helping tool for the buyers to secure their hard-earned money by establishing Regulatory Authority and Appellate Tribunal which continuously works for the development of the real estate sector and resolution of complaints received by allottees.
Authored By: Adv. Anant Sharma & Vaishnavi Srivastava