RERA and REAT — Homebuyer Rights, Builder Obligations, and Appellate Remedies in Uttar Pradesh

This article is for educational and legal awareness purposes only. It does not constitute legal advice or solicitation. Please consult a qualified advocate for advice on specific legal matters.

Introduction

The Real Estate (Regulation and Development) Act, 2016 (Act No. 16 of 2016) — referred to here as “RERA” — was enacted to address the systemic imbalance between builders and buyers: possession delays, unilateral plan changes, and promoter default. This article explains the rights of homebuyers (allottees), the obligations on promoters, the remedies for delayed possession under Section 18, the UP RERA complaint procedure, and the appellate remedy before the Real Estate Appellate Tribunal (REAT). It also covers the interaction with the Consumer Protection Act, 2019 and the Insolvency and Bankruptcy Code, 2016.

Scope of RERA — Section 3

Section 3 of RERA prohibits a promoter from advertising, marketing, booking, selling, offering for sale, or inviting persons to purchase any plot, apartment, or building in a real estate project, in any planning area, without registering the project with the Real Estate Regulatory Authority. The Act covers:

All projects where the land area exceeds 500 square metres; or
The number of apartments to be developed exceeds eight, inclusive of all phases.

Certain projects are exempt, including projects for which the completion certificate has been received prior to the commencement of the Act and projects intended only for repair, renovation, or re-development that do not involve marketing, advertising, selling, or new allotment.

Key Definitions — Section 2

Promoter — a person who constructs or causes to be constructed an independent building or a building consisting of apartments for the purpose of selling all or some of the apartments to other persons. Includes development authorities, agencies, and persons claiming under a power of attorney from the landowner.
Allottee — the person to whom a plot, apartment, or building has been allotted, sold, or otherwise transferred by the promoter, and includes the person who subsequently acquires the said allotment through sale, transfer, or otherwise. Does not include a person to whom an apartment is given on rent.
Carpet area — the net usable floor area of an apartment, excluding the area covered by external walls and the area under services shafts, exclusive balcony or verandah, and exclusive open terrace, but including the area covered by internal partition walls.
Real estate project — the development of a building or building consisting of apartments, conversion of an existing building into apartments, or the development of land into plots or apartments for the purpose of selling.

Obligations of the Promoter — Sections 11 to 18

Section 11 requires the promoter to upload, at the time of registration of the project, comprehensive details on the RERA website. These include details of the promoter, project, sanctioned plan, layout plan, approvals, names and addresses of the contractors, architect, structural engineer, and other persons concerned with the development of the project.

Other key obligations include:

Section 12 — Veracity of advertisement and prospectus. If a person makes an advance or deposit on the basis of an inaccurate prospectus or advertisement, the promoter is liable to refund the amount with interest, and the person may withdraw from the project.
Section 13 — Receipt of money before agreement. A promoter may not accept more than 10% of the cost of the apartment as advance payment without first entering into a written agreement for sale, registered under the Registration Act, 1908.
Section 14 — Adherence to sanctioned plans. The promoter cannot make any addition or alteration in the sanctioned plans, layout, or specifications of the apartment without the previous written consent of the allottee. Minor additions or alterations due to architectural and structural reasons are permitted, subject to disclosure.
Section 15 — Transfer of promoter’s rights. The promoter cannot transfer the majority rights and liabilities in respect of the project without the consent of two-thirds of the allottees and the prior written approval of the Authority.
Section 16 — Insurance. The promoter must obtain all such insurance as may be notified, including insurance in respect of title of the land and construction of the project.
Section 17 — Conveyance. The promoter must execute a registered conveyance deed in favour of the allottee, along with the undivided proportionate title in the common areas to the association of allottees, within a stipulated time.
Section 18 — Return of amount and compensation. This is the most invoked provision in delay cases. See below.

The Section 18 Remedy — Delay in Possession

Section 18(1) of RERA provides that if a promoter fails to complete or is unable to give possession of an apartment in accordance with the terms of the agreement for sale, or as the case may be, on the date specified therein, the promoter shall, on the demand of the allottee:

Return the amount received with interest at the prescribed rate, including compensation, if the allottee wishes to withdraw from the project; or
Pay interest for every month of delay, till the handing over of possession, at the prescribed rate, if the allottee does not intend to withdraw.

This is a powerful remedy. The allottee may elect between the two — there is no obligation to withdraw, and the allottee may continue with the project while collecting delay interest.

The “prescribed rate” of interest is fixed by the State Real Estate Regulatory Authority under Section 2(za) of the Act. The rates differ across States but are typically pegged to the State Bank of India Marginal Cost of Funds Lending Rate (MCLR) plus 1% or 2%.

In M/s Newtech Promoters and Developers Pvt. Ltd. v. State of U.P., (2021) SCC OnLine SC 1044, the Supreme Court upheld the constitutional validity of RERA, including its retroactive application to ongoing projects, and affirmed that Section 18 confers an unconditional right of refund with interest on the allottee where possession is delayed beyond the agreed date. The Court held that the allottee’s right under Section 18 is not lost merely because the allottee opts to continue with the project at some stage.

Allottee’s Rights and Duties — Sections 19 and 20

Section 19 of RERA confers important rights on allottees, including:

The right to obtain information about the project from the promoter;
The right to know the stage-wise time schedule of completion;
The right to claim possession in accordance with the agreement;
The right to claim refund with interest or compensation, as the case may be;
The right to have necessary documents and plans after handing over physical possession.

Section 19 also imposes duties on allottees, including the obligation to make payments and other charges in accordance with the agreement and to take physical possession of the apartment within two months of the receipt of the occupancy certificate.

Functions of the Real Estate Regulatory Authority

Under Sections 32 to 37, the Authority’s principal functions include:

Registration of real estate projects and real estate agents;
Maintenance of a web-based database of all registered projects;
Adjudication of complaints filed by allottees, promoters, or real estate agents;
Imposition of penalties for non-compliance.

A complaint may be filed before the Authority under Section 31 by any aggrieved person — allottee, promoter, or real estate agent — alleging violation of the provisions of the Act, rules, or regulations.

Procedure for Filing a Complaint Before UP RERA

The detailed procedure is laid down in the Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016. The broad steps are:

Register on the UP RERA portal at up-rera.in.
File the complaint electronically using Form ‘M’ (or such other form as prescribed). Attach the agreement for sale, payment receipts, demand notices, and any correspondence with the promoter.
Pay the prescribed filing fee as notified by UP RERA.
Service of notice on the promoter by the Authority.
Hearing before the Authority — the proceedings are quasi-judicial. The allottee may appear in person or through an authorised representative.
Order of the Authority — the order may direct refund with interest, payment of delay interest, completion of pending obligations, imposition of penalty, or such other relief as the Authority considers appropriate.

The Authority is required to dispose of complaints within 60 days from the date of filing, although in practice complex matters take longer.

Appellate Remedy — REAT under Section 43

Section 43 of RERA provides for the establishment of a Real Estate Appellate Tribunal. Any person aggrieved by an order of the Authority or the Adjudicating Officer may file an appeal before REAT within sixty days from the date of receipt of the order. The Appellate Tribunal is required to dispose of the appeal within 60 days from the date of filing, with reasons recorded for any delay.

Important features of an appeal to REAT:

Pre-deposit by promoter. Where the appellant is a promoter, the Tribunal cannot entertain the appeal unless the promoter has deposited the total amount payable to the allottee, including interest and compensation imposed on him, before filing the appeal (the proviso to Section 43(5)). This is a significant safeguard against frivolous appeals by promoters intended only to delay refund.
Allottee’s appeal. An allottee aggrieved by an order may also appeal — no pre-deposit is required of an allottee.
Further appeal to the High Court. Section 58 provides for an appeal to the High Court on any of the grounds specified in Section 100 of the Code of Civil Procedure, 1908, within sixty days from the date of communication of the order.

Interaction with the Consumer Protection Act

In Imperia Structures Limited v. Anil Patni, (2020) 10 SCC 783 and reiterated in M/s Newtech Promoters, the Supreme Court held that RERA does not bar a homebuyer from approaching consumer forums under the Consumer Protection Act, 2019. The two remedies are concurrent — the allottee may elect either route. The presence of an arbitration clause in the builder-buyer agreement does not oust the consumer forum, as held in Emaar MGF Land Ltd. v. Aftab Singh, (2019) 12 SCC 751.

In practice, the choice between RERA and the Consumer Protection Act depends on the relief sought, the speed of disposal in the particular State, and the pecuniary jurisdiction. RERA offers a sector-specific regulator with technical knowledge; consumer forums offer wider relief and a robust appellate structure.

Interaction with the Insolvency and Bankruptcy Code

Where a promoter has been admitted to corporate insolvency resolution under the Insolvency and Bankruptcy Code, 2016 (IBC), allottees are treated as financial creditors by virtue of the IBC (Second Amendment) Act, 2018. In Pioneer Urban Land and Infrastructure Limited v. Union of India, (2019) 8 SCC 416, the Supreme Court upheld this characterisation and held that allottees may approach the National Company Law Tribunal under Section 7 of the IBC. By the IBC (Amendment) Act, 2020, a minimum threshold was imposed for triggering Section 7 by allottees — at least one hundred allottees or ten percent of the total allottees of the same real estate project (whichever is lower) must join in the application.

Where a corporate insolvency resolution process is initiated under the IBC, RERA proceedings against the corporate debtor are stayed by the moratorium under Section 14 of the IBC. The IBC takes primacy by virtue of Section 238 of that Code.

Penalties — Sections 59 to 72

RERA prescribes substantial monetary penalties for non-compliance, including:

Section 59 — Non-registration of project. Penalty up to 10% of the estimated cost of the real estate project. Continued violation may attract imprisonment up to three years or a further penalty up to 10%.
Section 61 — Contravention of other provisions. Penalty up to 5% of the estimated cost of the real estate project.
Section 63 — Non-compliance with Authority’s orders. Penalty for every day during which such default continues, which may cumulatively extend up to 5% of the estimated cost of the real estate project.
Section 64 — Non-compliance with Appellate Tribunal’s orders. Imprisonment up to three years, or fine, or both.

Practical Takeaways for Homebuyers

Verify that the project is registered with UP RERA before booking; the registration number must be displayed on all advertisements and the agreement.
Insist on a written agreement for sale (registered under the Registration Act) before paying more than 10% of the cost.
Retain all payment receipts, the agreement, all correspondence with the promoter, and copies of the sanctioned plan.
If possession is delayed, send a written demand to the promoter quoting Section 18 and articulating whether you wish to withdraw or to claim delay interest while continuing.
File a complaint with UP RERA promptly; delay can complicate the matter.
Be aware that the appeal to REAT requires the promoter — but not an allottee — to deposit the awarded amount before the appeal is entertained.
Consider in parallel whether a consumer complaint, or (where appropriate and threshold is met) an application under Section 7 of the IBC, may better serve the immediate goal.

Useful Resources

Disclaimer: The information provided on this website is for general legal awareness and educational purposes only. It does not constitute legal advice, advertisement, or solicitation. No reader should act or refrain from acting based on this information without seeking professional legal counsel. Advocate Akhil Singh and this website are not liable for any actions taken based on the content provided herein.