Complaint Against Builder When Project Is Not Covered Under RERA

The RERA Act, 2016 provides an easy and speedy solution for homebuyers to file complaints against builders, claim a refund along with interest or compensation from the builder in case of any other form of violation by the builder such as delay in possession of property or violation of Builder-Buyer Agreement. However, when it comes to filing a complaint under RERA, it is imperative to ensure that the project bought by the homebuyer is covered under the RERA Act. When the project is not registered with RERA, the process to file a complaint against builder differs widely from the process of complaint in case of RERA-registered projects. This guide talks about how to file a complaint against the builder when the property is not registered under RERA.

Homebuyers who have purchased any real estate property covered under the Act can file a complaint in RERA in the prescribed format provided by the State RERA Authority when the project is covered under RERA, but the builder has failed/delayed to register it. Homebuyers can file a RERA complaint against the promoter or real estate agent if the property comes under the ambit of the provision and is not registered with RERA.

A complaint can also be filed against the builder if the builder promotes, sells, advertises the project without RERA registration when the project is liable to be mandatorily registered under the RERA Act.

This makes it essential to consult a RERA Advocate in India to know whether the project is covered under RERA and the homebuyer has a substantial case against the builder. The RERA lawyer will also guide the homebuyer and provide end-to-end guidance for filing and representing the complaint with the appropriate RERA officer/Authority. When the flat/project is not covered under RERA, the homebuyers have the option to file a consumer complaint against the builder with the District, State or National Consumer Court. A consumer complaint against the builder can be filed for any of the following issues:

1. Delay in delivery of property possession
2. Delivery of substandard or inadequate quality work.
3. Construction of the property, flat or project without complete permits from the local authorities.
4. Construction of the property on the illegally acquired land.
5. Fraud committed in the booking of the property.
6. Change in land use, layout plan or structure without the prior approval from the home buyer.
7. Levy of enhanced external development charges or hidden charges at a later stage.
8. Not providing the Completion Certificate or the Occupancy Certificate.

 

The homebuyer can hire a property lawyer and send a legal notice to the builder to rectify any of the situations as mentioned earlier, giving the builder an appropriate period. If the builder’s reply is unsatisfactory or there is no reply at all, the homebuyer can proceed to file a complaint with the consumer court.

A consumer complaint against the builder must be drafted and filed by an experienced property advocate in India and must be filed along with the relevant documents such as the copy of the builder-buyer agreement, payment receipts, allotment letter, bank statement, etc. Under the Insolvency and Bankruptcy Code (IBC), homebuyers are recognised as financial creditors of the builders and a CIRP i.e. corporate insolvency resolution process can be initiated against the builder’s company when it fails or delays to deliver the flat possession or when the builder is unable to pay refund or interest to the homebuyer.

Under Section 6 of the IBC, homebuyers can file an application for Corporate Insolvency Resolution Process against the builder in any of the following cases:

1. When the builder is unable to pay the refund amount or the interest on delayed possession of flat.
2. When the builder is unable to adhere to the RERA Order passed in favour of the buyer for refund or interest.
3. When the buyer was a part of a Subvention Scheme with the builder and bank.
4. When the builder is unable to deliver the possession of the property within the time specified in the builder-buyer agreement.

 

Homebuyer complaints about projects not covered under RERA are treated differently and follow a different protocol. Consulting a good property lawyer in India can help the homebuyers in identifying the best option out of the three options mentioned above as per their situation.