Refund, interest, and compensation claims under Section 18 of RERA

The government introduced the Real Estate (Regulations and Development) Act in 2016 to create transparency in the real estate sector and protect the rights of buyers. Most buyers are unaware of the rights and duties set out under this act. The main aim of this act is to create efficiency and transparency in the real estate sector and to safeguard buyers' rights in the real estate sector. Before the enactment of the RERA Act, buyers commonly faced the problem of not getting possession of the property in the decided timeline and the problem of low construction quality of the home or commercial place they bought.

There are other laws available for solving this problem, but that is not efficient and are more time-consuming. In 2016, the government introduced the RERA Act to create an efficient mechanism for speedy dispute redressal for buyers. Section 18 protects the homebuyers; before these provisions, buyers were left helpless in front of the builders or developers. Commonly, builders cause delays in completing construction and giving possession to the buyers. This provision assures them that they can claim compensation from builders for delayed possession. This provision makes builders liable when they break rules that cause loss to the buyers; they cannot make the buyer suffer for their mistakes.

Section 18 of the RERA Act

Section 18 is the provision that focuses on safeguarding the buyer's rights when they face delays in possession of the property or the builder does not complete a specific condition that the builder promised to complete for the buyer. As per this Section, buyers can demand compensation or cancel their booking if the builders delay in the possession of the property or fail to fulfil any promises made in the agreement.

As per this law, the builder is accountable for the delay in construction and possession of the property. Builders are also liable for completing commitments they decided to fulfil at the time of sale of the property to the buyers, like providing any specific amenities and maintaining particular qualities of the construction. If builders fail to complete any conditions, they are required to provide compensation as per Section 18 of this Act to the buyers. This compensation includes the return of the complete money, along with interest to the buyer if they choose to cancel the agreement with the builders for any reason mentioned in the above paragraph.

What are the important aspects of Section 18 of the RERA Act?

As per this section, there are some important aspects that every buyer should know. Let’s see in detail that aspect:

• If any buyers face a delay in possession of the property beyond the agreed-upon timeline, then the buyer has the right to claim compensation from the builders. Buyers can claim the full purchase amount from builders, including the cost of the delay.
• Buyers have the right to withdraw from the real estate agreement if they face a delay in the possession of the property or see that the builders do not fulfil their commitment in the agreement. In this case, buyers can cancel the agreement and demand a refund from the builders. This is important right now because it helps to prevent the loss of the buyer's investment.
• If the buyers see the construction defects in this case, buyers can contact the builders to solve this problem. In this case, if the builders are unable to fix this problem within 30 days, then the buyers can demand compensation from the builders.
• If the builders make a delay in the possession of the property, they will have to compensate the buyers. The compensation amount is the interest on the amount paid by the buyers to the builders for purchasing the property. The rate of interest is decided by the Real Estate Regulatory Authority (RERA).
• For any reason, if builders want to delay possession of the property, they should have to inform the buyers and provide a new date of possession to the buyers.

What is the role of Section 18 for home loan borrowers?

When any buyer takes a home loan to purchase a home in any real estate project, then Section 18 of this act is more important for those buyers. Because when the builders make delays in the possession of the property, it can directly affect your loan repayment period. Once the buyer takes a home loan, the EMI of the loan starts immediately after the disbursement of the loan, and due to the delay of possession, home buyers can shift to their new home, but their loan repayment still starts. In such a situation, home buyers can claim compensation for the delay, and buyers can claim an interest refund.

In any case, when the builders do not provide possession of the flats on the next promised date to the buyers, then they can claim a full amount refund from the builders. This helps the buyers to get relief for repayment of the home loan amount. This section plays a crucial role in safeguarding the rights and financial interests of the buyers who take home loans to purchase the property.

How can the buyers use their rights under Section 18?

If the buyers face a delay in the possession of the property, or the builders fail to complete the promises made to buyers at the time of selling the property. Then, buyers can take these necessary actions to get compensation from the builders.

• The first step taken by buyers is to add all terms and conditions of the sale to the sale agreement. Like the possession date of the property, specifications, promises of providing particular amenities, or any other promises made by builders to the buyers.
• As per the mentioned time and date in the sale agreement, if the builders do not provide possession or fail to complete any promises. Then the buyers can send a formal notice to the builder, asking about the reasons for delays and demanding compensation or a refund from the builder as mentioned in Section 18 of the RERA.
• If the buyers see that the builders do not respond to their formal notice and refuse to provide the compensation or refund amount. Then, buyers can file a complaint against the builders with the RERA authority. The RERA authority makes investigations into this issue. Once the investigation is complete, they find that the builders are breaking the rules; then they pass the orders for payment of the compensation and refund to the buyers.
• If any customers or buyers are not satisfied with the order of the RERA authority, they have the option of getting legal help and can file a complaint against the builder in the consumer courts.

Their process of filing a complaint under the RERA is decided according to each state's RERA authority. But let’s see the most common documents required for buyers to file a complaint against the builders:

• List of names of all owners and joint owners
• Date of allotment and date of booking of the property
• Building no/ flat no/ shop no. of the property.
• Total value of the property
• Documents or receipts of the money paid to the builders till the date of filing a complaint.
• Sale agreement date
• Date of possession of the property in the sale agreement.

The process of filing a RERA complaint is crucial and time-consuming without hiring good legal help in this matter. Buyers need legal help from filing a complaint to representation in court; sometimes, buyers are not happy with the orders of the RERA authority. In that case, they want to file a complaint in the consumer court; for this, they need a professional advocate who can represent their case in court.

So if you are buyers who face all these consequences and want good legal help, you just need to visit our law firm website, Right To Law Firm. In a few steps, you can book an appointment with our expert lawyers. Our lawyers have years of experience in handling cases related to RERA; with their professional knowledge, they can help you solve this problem in a time-saving manner.