What Are The Penalties Levied On The Builder For Delayed Possession Under RERA?

  • To protect the interest of homebuyers and weed out unethical players from the market, the Real Estate(Regulation and Development) Act, 2016 (RERA) has proposed heavy penalties on builders who delay their projects.
  • However, the reasons for delay in delivery need to be taken into account, as it should not be the result of external forces which are beyond the control of builders.
  • If a project is delayed, developers are required to pay 10% interest to the buyers on the invested amount.
  • RERA recommends imprisonment for a term which may extend up to three years, or fine which may extend up to 10% of the estimated cost of the real estate project, or both, in case of non-compliance with the Act.
  • There are a number of clauses in the Act that aim toward protecting the buyer’s interest and enabling a transparent system in the real estate sector thereby increasing accountability on the part of the builder.
  • In case of any structural defects arising within five years of handing over the possession of project to buyers, developers will be liable to rectify such defects without further charge.
  • The builder also cannot force the buyer to take ownership of the property in case he has delayed the delivery of the same. In such a case, they would be required to return the money paid by the buyer along with interest.