Section 18 of RERA empowers homebuyers with rights to timely possession and compensation for delays or defective land titles. Discover its significance and implications in this informative article.
Introduction
The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, has transformed the Indian real estate landscape by introducing transparency and accountability. Know the Process for Decoding Section 18 of RERA.
Section 18 of RERA is a pivotal provision that offers substantial protection to homebuyers. In this blog post, we’ll dissect Section 18 to understand how it ensures timely possession and compensation for buyers in the real estate sector.
Understanding Section 18
Section 18 of RERA primarily addresses the rights and remedies available to homebuyers when a promoter (real estate developer) fails to meet specific obligations. Let’s break down the key components:
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Delayed Possession and Compensation
(a) Failure to Deliver on Time: If the promoter fails to complete or provide possession of an apartment, plot, or building as per the terms agreed upon in the sale agreement, or within the specified timeline, the promoter becomes liable to the allottees.
(b) Withdrawal Option: The allottees have the option to withdraw from the project if they choose. In such cases, the promoter must return the amount received for the property with interest, as prescribed by law.
(c) Interest for Delay: If the allottee decides not to withdraw and the possession is delayed, the promoter is obligated to pay interest for every month of delay, again, at the rate specified by law.
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Compensation for Defective Titles
The promoter must compensate the allottees if they suffer any loss due to a defective title of the land on which the project is developed. This ensures that homebuyers are protected against uncertainties related to land titles, and they can seek compensation as per the provisions of RERA. Importantly, the claim for compensation is not subject to any time limitation imposed by other laws.
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Non-Compliance with Other Obligations
Apart from timely possession and title-related issues, Section 18 of RERA also covers situations where the promoter fails to meet other obligations specified under the Act, its rules, regulations, or the sale agreement. In such cases, the promoter is liable to pay compensation to the allottees as per the provisions of RERA.
Right to Get Refund Under Section 18 RERA: Landmark Case Laws
The right to request a refund with interest under Section 18 of RERA is an absolute and unrestricted entitlement. The Hon’ble Supreme Court, in the case of Imperia Structures Ltd. vs. Anil Patni and Another, affirmed that Section 18 grants an unequivocal right to a homebuyer to receive a refund of the amount deposited with the developer along with interest at the prescribed rate if the developer fails to complete the apartment or provide possession by the specified date in the homebuyer’s agreement.
In the past, authorities would often link refund decisions to the construction stage and might not issue a refund order if the developer had obtained an occupancy certificate or if the construction was at an advanced stage. However, it is now firmly established in law that the right of the allottee to seek a refund is absolute and not subject to any contingencies or stipulations.
This principle was reaffirmed by the Hon’ble Supreme Court in the case of Newtech Promoters and Developers Pvt. Ltd. vs. State of U.P, where the Court emphasized that Section 18(1) confers an indefeasible right upon the allottee to demand a return of the amount if the developer fails to hand over possession as per the agreement or complete the project by the specified date. Any justifications the developer offers as a defence are insignificant, and the regulatory authority can determine the refund and prescribed interest.
Interest for Delay in Possession: Landmark Case Laws
Regarding interest for delay in possession, Section 18(1) also states that if the allottee chooses not to withdraw from the project, they are entitled to receive interest for every month of delay until possession is handed over by the developer.
This entitlement cannot be denied based on the absence of a registered agreement to sell. In a recent order, the Maharashtra Real Estate Appellate Tribunal held that the lack of a registered agreement does not prevent a homebuyer from receiving interest relief for delayed possession. Any other document, such as an allotment letter, brochure, template, or email communication mentioning the possession date, can be used to calculate the delay in possession.
Right to get Compensation under Section 18 RERA: Landmark Case Laws
In addition to the refund, buyers can also seek compensation under Section 18(2) and 18(3) of RERA if:
- They suffer a loss due to the defective title of the land.
- The developer fails to fulfill any obligations under the RERA Act or its associated Rules and Regulations.
- The developer breaches the terms and conditions of the Agreement to Sell.
The authority to determine compensation lies with the adjudicating officer, appointed by the Real Estate Regulatory Authority in consultation with the government. Buyers must file a separate application before the adjudicating officer for compensation, and the authority cannot make decisions on compensation matters.
The Hon’ble Supreme Court clarified the powers of the Authority and Adjudicating Officer in granting refunds and compensation in the case of Newtech Promoters and Developers Pvt. Ltd. Vs. State of Uttar Pradesh.
The Court noted that the regulatory authority has the power to examine and determine complaints related to refunds, interest on refund amounts, interest for delayed possession, penalties, and interest thereon. On the other hand, the adjudicating officer exclusively holds the authority to decide matters related to compensation and interest.
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Read more:-
- How to Search Project Details on Maharera?
- Maharera Project Details
- Functions and Powers of RERA Authority
