The Real Estate (Regulation and Development) Act, 2016 (RERA) aims to resolve common issues between builders and homebuyers by improving accountability and transparency in real estate transactions. The law establishes mechanisms to resolve disputes efficiently, and mandates timely delivery, quality, and accurate information regarding projects. RERA also ensures the timely completion of residential and commercial projects, safeguards homebuyers, and promotes fair practices.
Provisions for Consumer Protection:
Under RERA, homebuyers are legally entitled to:
- Refund with Interest: If the builder fails to provide possession of the property on time (Section 18).
- Project Information: All projects must be registered with RERA, ensuring that the buyer receives accurate details about the project’s status, approved plans, and delivery dates.
- Guarantee of Quality: Builders must guarantee the quality of the construction for 5 years from the possession date. If defects arise within this period, the builder is obligated to fix them (Section 14).
These legal provisions protect homebuyers from fraud, substandard work, or failure to deliver as promised.
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👨👩👧👦 Homebuyer’s (Plaintiff) Perspective in Detail
Legal Rights of Homebuyers:
- Timely Delivery of Possession:
Under Section 18, if the builder fails to hand over possession as per the agreement, the buyer is entitled to a refund along with interest calculated from the due date of possession to the actual date of possession. Buyers can also demand compensation for the delay.
- Complaint Against Deviation from Promised Features:
If the builder deviates from the approved project plan, buyers have the right to demand rectification or even compensation for changes that affect their agreement. Builders must construct as per the promises made in the advertisement and agreement (Section 14).
- Defects in Construction:
Section 14 also mandates that builders correct any structural defects or poor workmanship within five years of possession. The builder is liable to repair the defect or reimburse the buyer for any repair costs incurred.
- Wrongful Advertising:
Under Section 12, buyers can sue a builder for misleading advertising. If the builder advertises a project that doesn't match the actual product, the buyer has the right to demand compensation or a refund.
- Project Delays:
Buyers can claim compensation for delayed possession under Section 18 of the RERA Act. This includes interest for the delayed period, and in some cases, the buyer can demand a complete refund with interest if the delay is unreasonable.
Filing Complaints:
- Complaints can be filed online through the respective State RERA portal.
- A buyer can file a grievance by submitting all relevant documents, including the sale agreement, proof of payments, and any communications with the builder.
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🏗️ Builder’s (Defendant) Perspective in Detail
Legal Defenses for Builders:
- Force Majeure:
If the project was delayed due to unavoidable circumstances (natural disasters, government policy changes, etc.), builders can invoke the Force Majeure clause to delay or avoid responsibility for penalties (Section 6).
- Buyer’s Default in Payment:
If the buyer fails to pay as per the agreement, causing a delay in project completion, the builder can defend itself by demonstrating that the delay is due to the buyer’s non-payment. The builder is within rights to withhold possession until payment is made.
- Regulatory Delays:
Sometimes, delays in obtaining required approvals or clearances from local authorities can cause construction delays. Builders may claim regulatory delays as a reason for the delay in possession.
- Completion Certificates:
Builders can defend their position if they can provide evidence of completed work and that possession was offered as per the agreement. If the buyer has refused possession without valid reasons, the builder can argue for non-compliance by the buyer.
Builder’s Legal Obligations:
- Registration with RERA:
All builders must register their projects with RERA before advertising or selling. This ensures transparency and provides legal legitimacy to the builder’s marketing activities.
- Funds Usage:
Under RERA, builders are required to use the funds raised for the project only for its construction. Builders cannot divert funds to other projects or uses. Non-compliance can lead to severe penalties (Section 4).
- Transparency:
Builders must share regular updates about the construction progress with RERA and ensure that any changes are notified to the buyers.
- Defects Warranty:
The builder must fix any defects in construction within five years of possession or compensate the buyer. Builders can defend themselves by proving that the buyer did not report defects or failed to meet maintenance requirements.
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⚖️ RERA Legal Procedure:
Step-by-Step Guide:
- Complaint Filing:
- Complaints are filed on the RERA State Website, specifying issues like possession delay, defect claims, deviations in construction, etc.
- Buyers need to attach the sale agreement, proof of payments, photographs of defects (if any), and communication with the builder.
- RERA Notice:
After the complaint is filed, RERA sends a notice to the builder and requires them to respond within a set period (usually 15-30 days).
- Submission of Evidence:
Both parties need to submit all evidence, such as contracts, receipts, photographs, emails, etc., to substantiate their claims.
- Hearing and Argument Presentation:
A hearing is scheduled, where both parties present their arguments. Buyers and builders may be given the opportunity to cross-examine each other’s evidence.
- RERA Order:
The RERA authority will issue an order based on the evidence and arguments presented. The order may include:
- Compensation
- A refund with interest
- Directions for the builder to rectify defects or complete work
- Appeals:
If either party is dissatisfied with the decision, they can file an appeal with the Real Estate Appellate Tribunal (Section 43). Appeals must be filed within 60 days from the RERA decision.
Important Sections to Note:
- Section 12: False advertising and misleading information.
- Section 18: Refund or compensation for delayed possession.
- Section 14: Warranty for structural defects.
- Section 31: Complaint filing against builder default.
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💼 Common RERA Disputes Handled:
- Possession Delays:
Buyers often seek compensation for delays in possession. Builders may defend themselves by citing reasons like force majeure or buyer defaults.
- Deviation from Promised Features:
Discrepancies between the agreed-upon and delivered project features lead to legal claims. Builders may be required to rectify or offer compensation.
- Misleading Advertisements:
If a builder has misrepresented the property in advertisements, the buyer may seek redress under Section 12.
- Defective Construction:
Buyers can claim compensation for structural defects or poor workmanship discovered within five years of possession.
- Unregistered Projects:
Selling property without registering under RERA can lead to severe penalties for the builder, and buyers may be entitled to compensation.
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