You bought your home. You were promised possession by a particular date. That date has passed—and you are still waiting. Days, months, or years have passed by.
What can you do when a builder delays possession?
The Real Estate (Regulation and Development) Act, 2016 (RERA) gives homebuyers important rights in such situations.
Do you still want the home?
And what you can do may depend on one important question:
When does delay in possession become a problem?
The first thing to check is when the builder promised to give you possession.
This date will usually be mentioned in your Agreement for Sale. The agreement may also provide for a grace period or specify certain conditions relating to possession.
You can also check the project’s RERA records to understand its registered status, including the timeline recorded for the project.
But the timeline in the RERA records and the possession date promised to you in your Agreement for Sale may not always be the same. What matters is understanding the dates and circumstances applicable to your particular purchase.
So, if the possession date promised to you has passed and you are still waiting for your home, you may have a claim under RERA.
What are your rights if the builder is late in giving possession?
If the builder fails to give possession in accordance with the agreed terms, you, an “allottee,” may have two different choices under Section 18 of RERA, depending upon whether you want to continue with the project or not.
Some RERA terms you will see in this article
Builder or Promoter?
You will often hear both the words “builder” and “promoter” when talking about buying a home. In everyday language, we can use them interchangeably. But under RERA, “promoter” is the broader legal term. It can include a builder or developer and, depending on the project, may also include a landowner or another person responsible for developing and selling the property. You can understand a promoter to mean the person or entity legally responsible for the obligations imposed by RERA.
Allottee
An “allottee” simply means the person who has been allotted the flat, apartment, plot or other property by the promoter—in everyday language, the homebuyer.
So, coming back to the options a homebuyer may have when facing delay in possession.
The precise position will depend on the circumstances. The length of the delay, the terms of the Agreement for Sale, the status of the project and the conduct of both sides may all matter.
The promoter may also argue that the delay was caused by circumstances beyond its control, such as:
- delayed government approvals;
- shortage of labour or materials;
- changes in regulations; or
- a force majeure event, where applicable.
But simply describing a delay as “force majeure” does not, by itself, settle the question. Whether a particular event qualifies, and what effect it has on the builder’s obligations, will depend on the circumstances and the terms of the agreement.
So, before deciding to withdraw from the project or continue with it, read the agreement and understand the consequences of your choice.
Option 1 — You still want the home
If you still want the home, you do not necessarily have to withdraw from the project.
Under Section 18, an allottee who does not wish to withdraw may claim interest for the period of delay, in accordance with the Act and applicable rules.
The interest continues for the period of delay until possession is handed over, as provided under Section 18.
Option 2 — You no longer want the home
If you no longer want to continue with the project, Section 18 provides for withdrawal and refund of the amount paid to the promoter, along with applicable interest and compensation as provided under the Act.
The Supreme Court has explained the significance of these two choices in Imperia Structures Ltd. v. Anil Patni.
What if the builder finally offers possession?
Not necessarily.
Does the offer of possession mean that the earlier months or years of delay simply disappear?
The Supreme Court has considered cases involving substantial delays followed by offers of possession. In Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, the Court recognised that a homebuyer cannot necessarily be compelled to wait indefinitely for possession.
So, a late offer of possession does not automatically erase the consequences of an earlier delay. However, the offer can raise several important questions. How the delayed offer affects the buyer’s rights will depend on the facts of the particular case.
Was the flat actually ready?
A builder saying that the flat is “ready” does not necessarily mean that the property is legally ready for possession. The stage of construction and the actual condition of the property may need to be considered.
Were the necessary approvals obtained?
Before a property can be lawfully occupied, the required approvals and permissions must be in place. A mere offer to hand over the keys may not be enough if the necessary approvals are still pending.
When was the Occupancy Certificate issued?
The Occupancy Certificate can be important because it indicates that the building has met the requirements necessary for occupation, subject to the applicable local laws. Therefore, its date may be relevant when determining when the property was actually ready for lawful possession.
Was the possession legally capable of being handed over?
In other words, was the builder in a position to give you lawful possession, not merely physical access to the flat? This is why the construction status, approvals and relevant certificates can matter.
Has the buyer already exercised a right to withdraw?
If the buyer has already taken steps to withdraw from the project and seek a refund, the timing and nature of those steps may become important when a later offer of possession is made.
The option you choose under Section 18—whether to continue with the project or to withdraw—may also depend upon several questions specific to your circumstances. Here are some questions that may help you understand your position before deciding what to do next.
Can you claim compensation?
Possibly—but compensation and interest are not the same thing.
Section 18 specifically provides for interest in cases of delay. It also provides for compensation where applicable.
For example, a buyer may have suffered additional loss because of the delay. Whether that loss can be recovered will depend on the circumstances of the case.
So, don’t assume that every expense caused by the delay will automatically be payable by the builder.
What about rent and EMI?
“I have been paying rent and EMI because my house wasn’t delivered. Can I recover that money?”
This is probably one of the first questions a homebuyer asks:
The answer is: not automatically.
The delay may have caused you additional financial loss, and you may be able to claim compensation depending on the circumstances of your case.
So, don’t throw away those rent receipts, loan statements or payment records. Keep them safely, along with your correspondence with the builder about the delay. They can help show how the delay affected you financially.
What if I also delayed my payments?
A builder may also point out that the buyer did not make some payments on time.
That can become relevant to the dispute. For example, if the buyer’s own payment default affected the progress of the transaction, the builder may rely on that when responding to a claim for delay.
But the buyer’s delayed payment does not automatically excuse the builder’s delay.
The two timelines have to be looked at together:
- When was the buyer supposed to pay?
- When did the buyer actually pay?
- When was possession promised?
- And when was possession actually offered?
The complete payment history can therefore be important when assessing a delayed-possession claim.
What should you keep as proof?
If possession is delayed, keep copies of:
- Agreement for Sale;
- Allotment letter;
- Payment receipts;
- Bank and loan statements;
- RERA project details;
- Builder’s demand letters;
- Emails and messages concerning possession;
- Communications explaining the delay;
- Possession letters, if any; and
- Occupancy Certificate, or other related completion/occupation documents, when available.
A clear record can help establish what was promised, what was paid, what happened, and when it happened.
Can you approach RERA?
Yes.
Section 31 of RERA provides a mechanism for an aggrieved person to file a complaint for a contravention of the Act, rules or regulations. Depending on the nature of the relief being sought, the matter may fall before the Real Estate Regulatory Authority or the adjudicating officer under the Act.
A homebuyer may also have remedies under consumer law. In Imperia Structures Ltd. v. Anil Patni, the Supreme Court clarified that the availability of a remedy under RERA does not, by itself, take away remedies available under consumer law.
The important thing is to understand what relief you are seeking and which forum has jurisdiction to grant it.
So, what should a homebuyer do?
If possession has been delayed, don’t rely only on verbal assurances from the builder.
Keep your Agreement for Sale, payment records and correspondence together. Check the project’s current status and ask for important updates, including any revised possession date and relevant approvals, in writing.
If you are considering continuing with the property, withdrawing from the project, or making a claim for interest or compensation, understand the consequences before taking that step.
And if the dispute cannot be resolved, consider approaching the appropriate forum for relief under the law.
“When will I get my home?”
The important thing is to move from:
“What does my agreement, the timeline and the law allow me to do now?”
to:
In short
A delay in possession does not mean that a homebuyer has to simply keep waiting. RERA provides important protections when possession is delayed, but the appropriate course depends on the facts of the particular case.
- Know the date.
- Understand the delay.
- Keep the documents.
- Know your options.