RERA complaint: refund or delay interest when the builder fails

What it is

The Real Estate (Regulation and Development) Act, 2016 — usually called RERA — protects people who buy flats, plots and buildings from builders. In the Act, the builder is the promoter and the buyer is the allottee. Every state and union territory has a Real Estate Regulatory Authority to enforce it, and an adjudicating officer — a serving or former District Judge — who decides compensation.

A RERA complaint is a case you file before that authority or officer against a builder who has broken the Act, its rules, or your agreement for sale. Section 31 lets any aggrieved person file one; an association of allottees or a registered consumer association can also file.

When it applies

The most common reasons to file:

• Late possession. The builder has not completed the flat or given possession by the date in the agreement for sale. Under Section 18(1), you may then choose:
  • to withdraw from the project and get back the amount you paid, with interest at the rate prescribed by your state's rules, plus compensation under the Act; or
  • to stay in the project and be paid interest for every month of delay until possession is handed over. The same applies if the builder's registration is suspended or revoked, or he stops business. Section 19(4) gives you the same right to a refund with interest.
• False advertising. If you paid on the strength of a brochure, advertisement or model flat that turned out to be false, Section 12 entitles you to compensation, or to withdraw with your full investment and interest.
• Changes to the plan. Under Section 14, the builder must build to the sanctioned plans and cannot make additions or alterations to your flat without your consent, beyond minor changes the Act allows.
• Defects after possession. Under Section 14(3), defects reported within five years of possession must be fixed free within 30 days, or compensation is payable.
• Too much money before an agreement. Under Section 13, a builder cannot take more than 10% of the cost as an advance or application fee before a written agreement for sale is signed and registered.
• An unregistered project. Section 3 requires registration before the project is advertised, booked or sold, subject to the exemptions the section lists.

The steps and the timeline

1. Gather the papers and work out the claim (first one to two weeks). List every payment with its date. Check the possession date in the agreement for sale, and any extension the builder claims. Look up the project on your state's RERA website using its registration number.

2. Decide: refund or delay interest. This choice shapes the whole complaint, so make it before filing.

3. Send the builder a written demand. Section 18 speaks of the amount being returned "on demand". A written demand from you or an advocate also puts the builder's answer on record.

4. File the complaint. It goes to your state's Authority, or to the adjudicating officer where compensation is claimed. Section 31(2) leaves the form, manner and fee to each state's regulations; most states take complaints online and show the fee when you file. Refund and interest claims and compensation claims may go to different forums in your state; the advocate will file in the right one.

5. Hearings. The builder is given notice and files a reply. Both sides are heard, often over several dates. In deciding compensation or interest, the adjudicating officer looks at the builder's unfair gain, your loss and whether the default is repeated (Section 72). For compensation applications, Section 71(2) asks the officer to try to decide within 60 days, with reasons recorded if not.

6. The order. The authority or officer can order a refund with interest, monthly delay interest, compensation, or that the builder carry out his obligations. If the builder does not pay, the amount can be recovered as arrears of land revenue (Section 40(1)); other directions are enforced in the manner your state prescribes (Section 40(2)).

7. Appeals. Either side can appeal to the Real Estate Appellate Tribunal within 60 days of receiving the order (Sections 43(5) and 44(2)); the Tribunal can allow a late appeal for sufficient cause. A builder's appeal is not heard until he deposits at least 30% of the penalty, or the full amount payable to you with interest and compensation, or both, as the case may be. A further appeal lies to the High Court within 60 days of the Tribunal's decision, on the grounds Section 100 of the Code of Civil Procedure allows (Section 58).

Documents needed

• The allotment letter and the agreement for sale, with the possession date.
• Every payment receipt and bank statement entry, with dates.
• The builder's brochures, advertisements and any emails promising dates or amenities.
• The project's RERA registration number and its page from the state RERA website.
• Letters, emails and messages with the builder, including any reason given for the delay.
• If you took a home loan, the loan agreement and the interest paid, since it may be part of your loss.
• For defects: photos, and your written complaint to the builder with its date.

Typical cost

• The filing fee is set by each state's RERA regulations and is shown when you file. It differs from state to state.
• The advocate's fee is quoted by the advocate after looking at your papers, before you pay anything. It varies with the state, the amount and how many hearings are expected. eMunshi does not set it.

What the advocate does

• Reads the agreement for sale and the payment record, and works out the refund or delay interest using your state's prescribed rate.
• Advises you on refund or staying, and on RERA or the consumer commission.
• Drafts and sends the demand to the builder.
• Prepares and files the complaint in the right forum, with the documents in order.
• Appears at the hearings and answers the builder's reply.
• Handles enforcement if the builder does not pay, and any appeal.

The self-serve document that comes before it

There is no self-serve document for a RERA complaint itself. Some state authorities ask for an affidavit with the complaint or later; you can make one online. If you want advice before choosing a route, a 30-minute call with an independent advocate from our panel starts at ₹999.