Delayed Possession, Broken Promises: Legal Remedies Every Homebuyer Should Know
When promises break, the law stands with the buyer — know your Homebuyer legal remedies before it’s too late-By Advocate Ashwini Kumar, Founder of My Legal Expert (MLE) For most Indian homebuyers, the dream of owning a home often turns into an ordeal when builders delay possession. Despite timely payments, many buyers are forced to wait years beyond the promised date, juggling EMIs and rent, and clinging to empty assurances from developers. While reforms like RERA have brought some order, project delays continue to plague the real estate sector, raising questions about builder accountability, regulatory enforcement, and consumer awareness. Comprehending the Legal Position The Real Estate (Regulation and Development) Act, 2016, introduced a much-needed order and transparency to the industry. It obligates the builders to register their projects and disclose the timelines, plans, and approvals in a clear way. The Act's Section 18 accords the home buyers the right to apply for a refund with interest if the builder does not deliver possession within the agreed-upon period. Otherwise, buyers can carry on with the project and demand compensation for the delay. Stipulations are made for builders to set aside 70 percent of the money received from buyers into a separate escrow account. This requirement is designed to prevent funds from being used for different projects or being shifted to other places, a scenario that was one of the main reasons behind halting developments in the past. Though this measure is in place, one can still notice violations of these provisions, and complaints to different state RERA authorities are on the rise as more consumers are becoming aware of their rights and options. Consumer Law Remedies Delayed possession also constitutes “deficiency in service” under the Consumer Protection Act, 2019. Consumer commissions across India have consistently directed errant builders to refund amounts with interest and compensate buyers for mental agony and financial loss. Though RERA was the one to change the playing field altogether, buyers still had the option of relying on the Consumer Protection Act of 2019. Not delivering a house within the promised time is a clear case of poor service and an unfair practice as well. Over the years, the consumer commissions have constantly ordered the builders to refund not only the principal amount but also to pay interest and, in addition, to compensate for giving mental agony and causing the consumer financial loss. Importantly, the Supreme Court has clarified that remedies under RERA and the Consumer Protection Act are not mutually exclusive. Buyers can choose either forum depending on what best suits their case, but cannot pursue the same relief in both after obtaining one. The Insolvency Aspect In case the builders face financial difficulties, the Insolvency and Bankruptcy Code (IBC) is yet another option where buyers may exercise their rights. Home buyers are treated as financial creditors and are entitled to file for bankruptcy if the developer fails to meet the obligations. This acknowledgment has further increased the power of buyers in negotiation. Nevertheless, filing for insolvency is a drastic step that should be taken only by the group, because such proceedings sometimes pave the way for the takeover of projects or liquidation, and this might not always be in the buyer’s interest. RERA Orders and Enforcement Challenges The issuance of a RERA order is a significant achievement, but the issue of enforcement still poses a great challenge. Securing a RERA order is only half the battle; enforcing it remains a major hurdle. Many developers ignore compensation or refund directives, forcing buyers to initiate further legal steps. The state authorities have the power to collect the funds in the same manner as land revenue, but sluggishness in execution is still a major source of frustration. The buyers, in most instances, have to endure further legal proceedings to get the builders to comply with orders. This gap in enforcement highlights a systematic problem: the distinction between the legal rights of buyers and on-ground realities. Precautionary Steps for Buyers The legal paths are strong, yet homebuyers should be wary of their actions before putting money down. Is the project registered with RERA? This is the first question homebuyers should ask themselves. After that, they should check the history of the builder and go through the agreement very carefully to become aware of the completion clauses and compensation terms. It is recommended that buyers steer clear of projects that are not registered or that are in the pre-launch phase and do not have the required approvals. Keeping a record of all payments, the marketing materials, and the correspondence can provide a strong case when any dispute arises. Buyers for commercial units must be overly careful about leasing clauses, where builders tend to incorporate vague clauses within the initial agreements and thereafter compel buyers to sign one-sided agreements later. Building Accountability Through Awareness The evolution of India’s real estate sector toward transparency is ongoing and requires a collective effort by regulators, developers, and consumers alike. Developers must view timely possession not just as a contractual duty but as an ethical commitment. Regulators should ensure swift enforcement of consumer and RERA orders, while buyers must remain vigilant, informed, and assertive in enforcing their rights. A delayed possession case is more than a private grievance; it represents a breach of trust in one of life’s most important investments. Restoring that trust demands continuous enforcement, awareness, and accountability, ensuring that homeownership remains a symbol of security and aspiration, not frustration and anxiety. FOR MORE BLOGS - beyondthepunchlines.com Read the full article
