An Allahabad-based homebuyer who paid ₹14.5 lakh towards a housing project in Gurugram found himself facing an uncertain future after the builder lost its registration, leaving the construction site stalled. The case highlights the risks homebuyers can face when a real estate project runs into regulatory trouble.
In his complaint, the individual claimed that he “was caught in the web of false promises of the agents of the respondent company” after booking a 642 sq ft unit in a housing property in Gurugram’s Dhanwapur village area.
He initially paid an amount of ₹1,28,470 to the builder, following which the payment was acknowledged and he was allotted one unit. Over time, he paid almost half of the flat’s total consideration of ₹26 lakh and was issued an allotment letter in December 2021, The Economic Times reported.
What went wrong?
The homebuyer claimed that after making the payment, he tried to contact the developer on several occasions, which did not elicit a satisfactory response. That’s when he decided to visit the property site, where he shockingly found that the progress in construction has been stalled.
“The respondent was never able to give any satisfactory response to the complainants for delay in construction of the unit and was never definite about the delivery of the possession,” the homebuyer was quoted as saying in the news report, adding that he kept pursuing the matter.
Despite the incomplete construction, the builder continued to demand instalment payments from the buyer. The homebuyer declined to make any further payments and instead sought a refund. However, the refund was also delayed, with the builder citing “unavoidable circumstances” and asking him to wait another 10 to 15 days, the complainant alleged.
After losing all hope and losing a considerable amount of money, the aggrieved homebuyer approached Haryana Real Estate Regulatory Authority () for redressal of his grievance. He ultimately won the case.
What did RERA rule?
In RERA’s judgement, the builder was directed to refund the full amount paid by the homebuyer, which amounted to ₹14.5 lakh, along with interest at the rate of 10.80% per annum, from the date of each payment till its actual realisation.
The authority has given the developer 90 days to comply with the ruling, warning that failure to make the payment could invite legal consequences. The complainant was also told that he may separately approach the Adjudicating Officer to claim that relief, according to the news report.
Haryana RERA stated that that if a developer discontinues its business due to suspension or revocation of its registration under the RERA Act, 2016, or for any other reason, the complainant is entitled to a full refund of the amount paid to the builder, along with applicable interest.
Since the registration certificate of this particular project stands revoked, the developer cannot carry out the business. Additionally, due to the builder’s serious violations, there seems to be no possibility of completing the said project by the promised timeline, the authority said in its order, maintaining that the homebuyer is entitled to a refund along with interest.
What happens to your money if a project loses its registration?
In situations like these, Section 18 of the RERA Act, 2016 is invoked which deals with the return of the paid amount and compensation. This ensures that the aggrieved party does not face a loss for something that’s not in their control.
According to this Section, if a promotor fails to complete the construction of a property or is unable to give possession of an apartment, plot or building, they must initiate a refund of the or full amount that is paid by the homebuyer. The exact compensation (including interest) depends on the terms of the agreement for sale and facts of the relevant case.
This rule applies in cases where a business of a developer is discontinued due to suspension or revocation of their registration for any reason.