The right of Compensation under RERA claiming compensation for consumers or buyers is the most important and supportive right provided by the RERA 2016 to the consumers or buyers. Before the enactment of this act, buyers faced financial loss and mental trauma for these reasons: builders severely delayed possession and made low-quality construction of property or made misleading false advertisements, not completing the promises about providing amenities or services.
Homebuyers or other buyers make purchases and investments in the property project and mostly face the problem of delay in possession of the property from builders. Due to this reason, buyers face challenges like purchasing a home while still living in the rental house and paying rent, or they start to pay their home loan installments if they buy a home on loan but don’t get possession of the property. To avoid this suffering for consumers or buyers, RERA gives rights to the consumer to claim compensation for the reasons of delay in possession of the property from builders.
If the consumer sees any construction defects in the property, such as defects in the walls of the house or any other property, or faces issues of leakages or quality defects in services that are provided by builders. Due to this consumer facing any loss, in that case the builder is accountable to solve these defects or to pay compensation to the buyers. Once the consumer gives a complaint to the builders for any of these defects, then within the 30 days the builders must resolve these problems as per this act. And if the builder or developer fails to do this then the consumer or buyer can claim compensation for this from the builder. If the buyers face any loss due to misleading advertisements or false promises made by builders. Or builders fail to complete any promises that they make at the time of selling the property; then, in both cases, buyers can claim compensation under the RERA Act.
If you are a buyer and face these issues regarding your property, you want to claim the compensation or get relief from this issue. Experts suggest buyers must take professional advice because proving these reasons in front of the authority and understanding the RERA provisions is complicated and crucial. Buyers need to take advice from RERA expert lawyers. Buyers can choose our firm, Right To Law Firm, as their legal help in this matter. Our firm has expert and experienced RERA lawyers in the nation; our lawyers have years of experience in handling cases related to the RERA. With their expertise, they can help you to coordinate and discuss these problems with builders to resolve them. If the builders fail to solve your problem, then we help you to file a claim for compensation as per the RERA Act.
Which legal provisions of the RERA Act deal with reasons for claiming compensation?
Section 12 of the the RERA
If any buyers make any advance payment on the basis of advertisement, model buildings or information based on notice of the project, or by seeing model plots or flats. After making payment, he suffers financial loss due to these false statements from builders; then the buyer must be compensated by the builders for this fraudulent activity. In this case, if due to this fraudulent activity by builders, like providing false advertisement or mentioning wrong information in the notice of the project. The buyers decide to withdraw from that real estate project, then the builders must return the full amount of the investment to the buyers with the interest and compensation.
Section 14(3) of the RERA
As per Section 14(3) of this act, there is a five-year defect liability period for builders after giving possession of the property to the buyers. In this period, if the consumer sees any structural defects in the property, then buyers can contact the builders to rectify this defect from the builders without spending any money. Structural defects such as defects in workmanship, defects in construction of the property, or defects in services provided by builders: then it’s the duty of the builders to solve this defect within the 30 days after receiving a complaint from buyers.
It is the duty of the builders to solve this defect or improve the quality of services in the 30 days after receiving the notice from the buyers. This clause is applicable for five years after the possession of the property; these responsibilities are given to the builders under the RERA Act. If the builders do not comply with this, they can face penalties and fines from the RERA regulations. They have to pay the compensation along with the interest to the buyers for not completing their responsibilities under the law. If the builders fail to do this, then buyers can claim compensation from the builders, because this act gives a warranty to the buyers on the construction for five years after taking possession of the property.
Section 18 of the RERA Act
Section 18 of the RERA Act provides the right to the consumer or buyer to claim compensation or demand the return of the purchase amount from the builders. If the builders do not give possession of the property in the decided timeline then the consumer or buyer can file a claim for compensation from the builders. When the builder fails to give possession of the property in time, buyers face unnecessary financial loss or mental trauma for the mistake of the builders. In this case they can choose to withdraw from the project, and then the builder must return the amount he received for the purchase of property along with interest and compensation as per the decided rate of the RERA Act.
If buyers do not want to withdraw from the property projects, then they can claim the interest amount from the builders for every month of delay until they receive possession of the property. The rate of interest amount is decided by the RERA Act. If the builders fail to provide this compensation to the buyers, then the buyers can file a claim for compensation as per the RERA Act.
As per this section, if the builder fails to complete the promises made by him at the time of selling the property to buyers, then buyers can claim compensation as per the rule of this act. When any builder makes a promise to provide any special amenities or any other service to buyers, and at the time of possession of property he fails to complete that promise, then he is liable to pay compensation to the buyers.
How to claim compensation under the RERA Act?
To claim compensation, buyers need to follow the proper process as per the mention in the RERA Act, 2016.
The first step that must be taken by buyers is that they must identify their issue, like if there is a delay in possession , or they notice any structural defects in the construction of the building or flat, or builders show them false advertisements. Due to that misleading situation, you make an advance payment or deposit, or the builder promises to give you some amenities or services, and now he fails to complete his promise. In this situation, buyers must give notice regarding their problem or issue to the builders. Buyers must ask the builders to either rectify the issue or provide monetary compensation to you. Due to any of the issues that are mentioned in the above line, if you want to withdraw from the project, then ask for the return of your money along with applicable interest and compensation as per the RERA Act.
If the builder resolves your issue, then there’s no need to move forward to the next step, but if the builder fails to provide compensation or not accept their mistakes,. Then you can file a complaint against the builder in your respected State Authority of the RERA. According to your issue, you need to collect evidence. For delay in possession, you need a copy of the sale agreement and a copy of the conversation with the builder. Or for structural defects, you need a copy of photographs that prove the defects, and if builders fail to complete any promise, then a copy of the sales agreement as proof. If the builders made any fraudulent advertisement, then you need to collect a copy of that misleading advertisement.
You can file a complaint against the builder on the RERA website; you just need to file a complaint according to your particular issue. Such as for delay in possession and fake promises from the builder, then file a complaint under Section 18 of the act. Then for defects in construction, come under Section 14(3) of the act and for misleading advertisement and mentioning false information in notice, come under Section 12 of the act. Once you file a complaint, RERA will schedule the hearing for both parties to listen to both parties.
In the hearings, both parties present their own side, and the complainant presents all the issues faced by them. Builders defend that issue by saying that whatever issue arises in complaints is a very minor issue, or the issue faced by the complaint is not under the control of the builder, etc. The complainant submits their evidence in the court and if builders want to submit any documents for their defense, they can submit them. After hearing from both parties and checking if the evidence is true or not, the court has given its decision to both parties. If the complaint is true, the court can order relief for buyers; they order the builders to rectify the defect in the decided timeline or order them to provide compensation to the buyers.
Why you choose the Right To Law Firm as your legal experts in the RERA matter
This process is very time-consuming, and proving the issue in court is not an easy task. Taking professional legal help in this process will definitely help the complaint to get favorable results. Our firm’s lawyers help you from sending notices to the builders, collecting evidence, and filing complaints on the RERA website to effectively representing your case in front of the RERA Authority to get quick and effective solutions. If you are builders facing fake complaints from the buyers, then we help you to defend in front of the RERA Authority. To avoid unnecessary trauma and financial loss for builders.
FAQs – Compensation under RERA
Can RERA impose the penalty on builders if they fail to provide compensation for a delay in possession of the property?
Yes, RERA can impose penalties on builders for nonpayment of compensation to the buyers; builders can face fines up to 10% of the estimated cost of the project. Can also face imprisonment up to three years or can face a fine and imprisonment together.
Under which section of the RERA, buyers can file a complaint ?
Buyers can file a complaint under Section 31 of the RERA Act. Any aggrieved person can file a complaint with the RERA authority or with the adjudicating officer if they face any violation or breaking of rules as per the mention in this act.
Five years defects warranty start from the date of registration or from the date of possession under the RERA?
Five years defects warranty starts from the date of giving physical possession of the property to the buyers of the property, under the RERA Act.
Which real estate projects are covered under the RERA Act?
Under the RERA Act, selling residential projects and commercial projects and selling plots or land are covered under this act. But RERA does not cover the rental arrangement and rental contract in any form.
What options are available to buyers if the builders refuse to return the money as per the RERA order?
If builders do not repay the buyers’ money as per the RERA order, then buyers can file an execution petition in the RERA Authority for enforcement of the RERA order on builders. Or else buyers can make an appeal in the Real Estate Appellate Tribunal or even make an appeal in the court against the builder.