From Investment to Reality - Navigating Possession and Buyer Rights Under RERA in Indian Real Estate

For every homebuyer, the happiest milestone is when their investment materializes as they receive possession of their property. This moment transforms their financial commitment into a tangible asset.

The Critical Importance of Possession

The possession date is more than just a handover; it signifies that the construction is complete and that the developer has secured the necessary legal and regulatory approvals from governing authorities. These approvals allow the buyer to finally take ownership of their home.

Several factors contribute to determining this date, including the availability of labor, raw materials, and a review of the construction timeline. Developers also account for the monsoon season and other periods when construction work faces restrictions.

Understanding Delays in Possession

Though delays in possession were once rampant in the real estate sector, the introduction of the Real Estate (Regulation and Development) Act, 2016 (RERA) has drastically reduced such issues. Delays often stem from factors such as insufficient construction funds, late approvals, or fluctuations in raw material prices. Additional challenges like poor project management, inefficient execution, and a lack of skilled labor further exacerbate the situation.

Securing regulatory approvals is crucial for timely possession, and any delay in this process can lead to significant setbacks. Moreover, unforeseen circumstances like political unrest or natural disasters can halt construction activities.

Empowering Homebuyers through RERA

RERA has placed considerable power in the hands of homebuyers. Buyers now have access to clear complaint mechanisms and penalties against non-compliant developers. If a builder fails to meet the possession date, RERA grants them a one-time extension. Should the developer still fall short of fulfilling the commitment, the buyer has the right to claim a full refund.

Additionally, buyers can file complaints against developers with RERA. In more serious cases, they can approach the metropolitan magistrate court for breaches of trust or contractual obligations. There is also growing advocacy for a standardized purchase agreement across India, which could unify buyers in holding developers accountable for deviations.

RERA Rights:

Protecting Buyers Under Section 18 of RERA, if a developer fails to deliver possession on time, buyers are entitled to:

Withdraw their booking and receive a full refund, including applicable interest.

Continue with the project, with the developer paying interest for each month of delay until possession is granted.

In either case, developers must refund the buyer within 45 days of the due date.

Conclusion: Trust Reputable Developers

To avoid the stress of delayed possession, homebuyers are advised to invest in projects from developers with a reliable track record. A trusted developer reduces the risk of delays and ensures a smoother path to receiving possession.