Summary of this article
RERA ensures compensation or refund for delayed possession
Buyers can seek legal remedies even after possession
Delays are treated as breach of contract under law
One of the most common grievances buyers have while buying a home comes at the time of possession. Delays in handing over the property are common in the Indian real estate market. For many buyers, late possession can mean a significant financial burden. Paying EMIs on a home they can not occupy while also paying rent somewhere else. From a legal angle, a delay in possession is not just a lack of proper planning or a matter of inconvenience. It becomes a breach of contract and the obligations that come with it. Recognising the hardships of homebuyers, the Indian law provides multiple remedies as a way to protect them.
When a buyer ‘books’ a property, the builder, along with the buyer, gets into a legally binding agreement. Namely, the Agreement for Sale specifies the date by which possession must be handed over; failure to do so is a breach of contract. The RERA Act adds statutory duties on the builders to complete their projects within the timeframe they first quoted.
Sam Chopra, President & Country Head, eXp Realty India, adds, “When a builder delays possession, Indian law offers homebuyers multiple remedies to protect their interests. Under the Real Estate (Regulation and Development) Act (RERA), buyers are entitled to seek compensation for the delay or exit the project with a full refund and interest, depending on their preference and contractual terms.”
Rights of the Buyer
In situations when possession is delayed, the Indian law provides the following options to the buyer as remedies:
Continue seeking the same property with the project and claim compensation for the delay
Withdraw from the project and get a refund with interest on the stated property.
Seek possession along with compensation for the delay.
The choice of which to go forward with depends entirely on the buyer and their financial position, the length of the expected delay, and the stage of construction the project is on.
Key Legal Principles
There are a few things about the legal workings that homebuyers must be aware of if these situations come up.
Courts and consumer forums have consistently emphasised that taking possession, even if it’s late, does not signal that the delay is forgiven or should be ignored.
If the buyer accepts the waivers or compensations, they must check if they have clarity of no further delays, or they should accept the possession with the full and final settlement amount.
As per the RERA provisions, even after taking possession, a buyer can approach the authority to avail the compensations that arose from delayed possession.
Legal Forums Available to the Buyer
Under the Indian Law, buyers have several forums for seeking justice and redressal; the path they take depends on the nature of the problem and the solution they are seeking.
RERA: RERA is often the most effective forum for addressing any delayed possession-related problems. Under RERA, buyers can get interest for every month of delay caused, a refund with interest if they choose to opt out of purchasing, and compensation for losses caused by the delay. Redressal with RERA comes with a faster disposal compared to civil courts, builder-specific and project-level accountability.
Consumer Courts: Buyers can seek justice in consumer courts under the Consumer Protection Act, as delayed possession simply qualifies as “deficiency in service”. With the consumer court, the remedies to the buyer are getting compensation for delay, a refund with interest, mental harassment damages, and litigation costs. Opting for consumer courts is particularly useful when buyers are seeking higher compensation for financial loss.
Civil Court: Civil courts have a broader jurisdiction, but are usually the least preferred option, solely due to the time it takes. People opt for civil courts if there is a complex contractual issue, claims with title issues, or when injunctive measures are needed. Civil suits cover a broader aspect of damages that can happen between the buyer and the developer, but they often take years to conclude.
Buyers can even seek a specific performance or an order from these authorities, which compels the builder to complete the order within a fixed timeframe.
During these procedures, builders tend to cite several reasons to get out of this, such as a shortage of labour, financial constraints, delays in approvals or a market slowdown. Courts and regulators do not accept these as valid grounds for an extension. Things like natural disasters or government-imposed bans are grounds that these bodies can accept.
Limitations of the Buyers
These remedies don’t come without their limitations; buyers have a given timeframe under which they have to seek redressal.
Under RERA, complaints should be filed within a given timeframe.
Consumer-related complaints must be filed within two years from the date of the problem, though delays can be justified within reason.
Civil suits have a three-year limitation period.
Delays in seeking help weaken the buyer's case, especially if the possession has already been accepted without any protest.
The key in situations like this is to act promptly and quickly, and know which forum they need based on their desired outcome. Informed legal actions, in cases of delayed possessions, do not translate into a complete loss; they just mean a more secure way forward. The developer's delay in possession is not just a contractual lapse; it is compromising the buyer. Buyers are always safeguarded by the law, and how one can be completely safe and sound comes from being informed.
