What is possession delay penalty as per RERA?

In case a builder fails to enforce the order passed by the RERA or surpasses RERA rules for possession in favour of the home buyers, those home buyers can file an application for the execution of the RERA order against the builder with the same RERA Authority. Seeking legal expertise for your property related matters? Contact experts at NoBroker The builder can be imprisoned under the RERA act for up to three years, or have to fill a fine extended to 10% of the estimated cost of the real estate project, or both. Also, the developers are liable to rectify the structural defects arising within five years of handing over the possession of the project to buyers without any charges as RERA compensation for delay in possession. I am attaching the RERA format of the legal notice against the builder for delay in possession with this answer for you. This should further clarify RERA rules for delayed possession. For those who are in a sticky situation and if builder does not give possession on time this could come in handy for you. I will further say that you should not budge and definitely ask for compensation for delayed possession of flats as per RERA. Read more: What are RERA rules for refund of booking amount?

Do you know what’s the biggest nightmare for a house buyer? It’s a delayed real estate project is delayed since it results in mental agony and huge monetary loss. There used to be no standard regulations earlier but the scenario has changed after the enforcement of the RERA Act, 2016. Let me tell you about the RERA penalty for delay in possession. Avail NoBroker’s Legal Services for the verification of property documents RERA Rules for Delayed Possession RERA gives house buyers a choice to get either interest on delayed possession or a complete refund of the amount paid along with interest.

•       If the promoter fails to complete the project within the time as specified in the sale agreement or delays the property possession, they have to return the amount received from the buyer, along with the due interest. The interest decided is 10% of the amount invested by the buyer. If the builder fails to pay the required compensation, he can face a fine of up to 10 % of the estimated cost of the project or imprisonment for a term that may extend to 3 years or both.
•       In case the builder decides to change the project’s possession date, then the buyer can legally withdraw from the project and claim a refund of the paid amount within forty-five days.
•   If the buyer doesn’t withdraw the property possession, then the builder will have to compensate the buyer for the delay in the form of monthly interest till he hands over the property.

What if Builder Delay Possession Rera The aggrieved customer can file a complaint with the adjudicating officer or authority, appointed under the legislation. Now you know what to do if builder delays possession. Check out similar answers: What is RERA? In which year RERA was launched? What is the difference between Carpet area and RERA carpet area? Now you know about the RERA penalty for delay in possession.

The Real Estate (Regulation and Development) Act, 2016 (RERA) imposes penalties on builders who delay possession of property to homebuyers

Having dealt with a similar situation, I know how frustrating delays in property possession can be.

Here are some key points regarding possession delay penalties under RERA:

Compensation for delayed possession: RERA mandates that the builder or developer is liable to pay

compensation to

the buyer for any delay in handing over possession. If the promoter fails to complete the project within the time

as

specified in the sale agreement or delays the property possession, they have to return the amount received from the buyer, along with the due interest. The interest decided is 10% of the amount invested by the buyer. If the builder fails to pay the required compensation, he can face a fine of up to 10 % of the estimated cost of the project or imprisonment for a term that may extend to 3 years or both

Timeframe for possession: RERA defines a specific timeframe within which the builder or developer must deliver possession to the buyer.

Interest on amount paid: In addition to the compensation, RERA also provides for the payment of interest on the amount paid by the buyer.

Under the Real Estate (Regulation and Development) Act, 2016 (RERA), builders are held accountable for delays in property possession. Here are the key points of late possession penalty RERA:

1. Delayed Possession: If a builder fails to deliver possession on time, Section 18 of RERA provides options for homebuyers:

   • Termination: The buyer can terminate the agreement and seek a refund. The builder must return the entire amount paid by the consumer with interest.

   • Continuation with Delayed Possession Compensation RERA: Alternatively, the buyer can continue with the project and claim compensation from the builder for every month of delay until possession is granted.

2. Penalties for Builders:

   • Interest: Builders who delay possession must pay 10% interest on the value of the property.

   • Legal Consequences: If a builder neglects to provide stipulated compensation, they may face a fine of up to 10% of the estimated project cost, imprisonment (up to three years), or both.

I hope you found this answer helpful.

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What is the Penalty for Giving Late Possession?

 

What happens if builder delay possession as per RERA?  Find out details in my answer.

The Real Estate (Regulation and Development) Act, 2016 (RERA), introduced several penalties regarding the delay in possession of the property to safeguard the interest of the buyer in India. It is given as the "delayed possession penalty” under RERA.

According to RERA, if a real estate developer or builder fails to deliver possession of the property to the homebuyer within the agreed-upon time frame, they are liable to pay a penalty for the delay. The exact penalty and the conditions for its application can vary from state to state because each state in India has its own rules and regulations of RERA. Therefore, it will be better if you refer to the specific rules and regulations of the state where your property is located.

 Penalty under RERA for delay in possession :

1. Time Frame for Possession: Developers should provide a specific possession date to homebuyers when selling properties. If the possession is not given within this time frame, there will be a penalty.

2. Rate of Penalty:

   RERA rules for delay in possession state that

   the rate of the penalty for possession delay is given in the state's RERA rules. It may be a certain percentage of the total cost of the property or a fixed amount per square foot of the property. The rate varies based on the duration of the delay.

3. Right to Compensation: Homebuyers have the right to claim compensation for the delay in possession. This compensation is in addition to any other legal remedies available to them.

4. Interest on Penalty: In addition to the penalty amount, homebuyers are also entitled to receive interest on the delayed possession penalty.

5. Time Limit for Claim: Homebuyers must file a complaint within the specified time limit to the appropriate RERA authority about the delayed possession.

6. Defenses for Developers: Developers can also have certain defenses for possession delays that are beyond their control, such as natural disasters, governmental actions, or infrastructure failures. These defenses are subject to the terms of the agreement between the developer and the homebuyer.

So I hope it is all clear about

what happens if builder delay possession RERA

? The penalty provisions given in RERA are for the protection and relief of homebuyers facing possession delays in their real estate projects. 

Get in touch with legal experts for property documentation and verification Read more: How To Search Project On RERA Website? What if Property is Not RERA Registered 

A person buys a property with much effort and dreams and when he fails to get it within the time allotted, he has the right to get angry and file a case. I just wonder that even after knowing the RERA rules for possession, how can a builder delay giving the possession to the buyer? I remember when one of my friends invited me for the housewarming ceremony this February but had to cancel it due to the builder not giving possession.

She ultimately had to file a case against him and I think that is very much justified. They invested such a huge amount of money but when the time came, they did not get the property.

Get your property ready within the due time along with verified documents by availing NoBroker Buyer Plans.

RERA Compensation for delay in possession 

There are still some people who did not even know that it is illegal to not hand over the property within the due time. A buyer can not only file a case but also ask for a compensation. Yes,

compensation for delayed possession of flats as per RERA is justified and it is about 10% of the estimated cost of the project.

Which act states that the buyer can file a case?

Be ready for everything and know that a buyer can file a case as per the RERA Act 2016 against the builder if the possession is not handed over to him within the time mentioned.

It is high time to stop such scams and take serious steps towards false promises. Before you buy a property, get an idea about the RERA rules and seek experts’ advice as well if needed. 

Get your legal queries answered within a short time with best possible advice by experts from NoBroker Legal Services.

A builder can get imprisonment for up to three years or a fine of up to 10% of the estimated cost of the project as per RERA penalty for delay in possession. Due to regular delays in possession and continuous failure to the norms, RERA had to step in and put it out there to safeguard buyers interest and eliminate non-serious real estate players from the market. Click here to Read:Most asked Real Estate questions on NoBroker Forum. 

The RERA penalty for delay in possession in case a buyer wants to file a legal case against the builder is imprisonment for a term of up to three years or a fine which may extend up to 10% of the estimated cost of the real estate project or both for the builders who fail to comply with the RERA Act. 

Since the delay in possession of projects had become a norm, RERA stepped in to protect the interest of the buyers and weed out non-serious real estate players from the market.

If your builder delays the possession of your property, you can file a case and send legal notice to the builder for delay in possession under the RERA Act, 2016 or transfer their case from a CDRC to the State Real Estate Regulatory Authority. Under the RERA Act, a builder will have to pay 10% interest on the value of the property for delayed possession of flats.