Breach of Agreement to Sell under RERA: Remedies for Homebuyers in India

By NyayKart Legal Team - Experts in RERA, consumer disputes and property law across India.

This Article Written by Anushka Prashant Mahajan.

Learn how to handle breach of agreement to sell under RERA. Understand Section 18 refund rights, delay in possession remedies, MahaRERA complaint process and legal options available to homebuyers in India.

Introduction

Booking a home is one of the most significant financial decisions in a person’s life. However, delays in possession, changes in layout or refusal to refund money often result in breach of agreement to sell. Before 2017, homebuyers had limited remedies. The enactment of the  Real Estate (Regulation and Development) Act, 2016 ((RERA) fundamentally changed this landscape by introducing accountability, transparency and enforceable rights.

What is an Agreement to Sell under RERA?

An Agreement to Sell is a legally binding contract where the promoter agrees to transfer property to the buyer upon fulfilment of agreed conditions.

Under RERA:

• The agreement must comply with the prescribed format.

• Payment schedules must be clearly mentioned.

• Possession timelines must be defined.

• The project must be registered with the concerned RERA authority.

This ensures clarity and reduces scope for arbitrary changes.

Common Types of Breach under Agreement to Sell

A breach typically occurs when either party fails to honour contractual obligations. Common breaches include:

• Delay in possession beyond committed date

• Alteration of layout or amenities without consent

• Failure to obtain statutory approvals

• Refusal to refund upon cancellation

• Unjustified cancellation by developer

• Non-payment of instalments by buyer.

Remedies for Buyers and Developers under RERA

Section 18 of RERA - Refund and Interest

Section 18 of the Real Estate (Regulation and Development) Act, 2016 provides that:

• If the promoter fails to complete or deliver possession on time, the allottee may withdraw from the project and claim refund with interest.

• If the allottee chooses not to withdraw, the promoter must pay interest for every month of delay until possession.

• Compensation may also be claimed for losses due to false representations.

Also add:

Section 19 - Rights of Allottees

Section 19 of the Real Estate (Regulation and Development) Act, 2016 

Homebuyers have:

• Right to timely possession

• Right to information about project approvals

• Right to claim compensation

Section 31 - Filing Complaint

Section 31 of the Real Estate (Regulation and Development) Act, 2016 

Any aggrieved person may file a complaint before the RERA Authority.

Filing Complaint before MahaRERA

In Maharashtra, complaints can be filed online before MahaRERA.

Steps include:

1. Verify project registration number

2. Upload agreement and payment proof

3. File complaint under Section 31

4. Attend hearing

5. Obtain order for refund, interest or possession

MahaRERA has passed numerous buyer-friendly orders, reinforcing RERA’s consumer-centric approach.

The Supreme Court of India has consistently held that RERA is a beneficial legislation intended to protect homebuyers. Courts have affirmed that promoters cannot indefinitely delay possession while retaining buyers’ funds.

Rights of Developers in Case of Buyer Default

While RERA primarily protects homebuyers, developers also have certain rights. If an allottee fails to pay instalments as per the agreement:

• The promoter may charge interest for delayed payments.

• The allotment may be cancelled after due notice.

• The promoter may forfeit booking amount as per agreement terms.

RERA ensures a balanced regulatory framework protecting both parties.

The Supreme Court of India in M/s Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh (2021) clarified that RERA authorities have jurisdiction to order refund and interest, reinforcing the Act’s consumer-protection objective.

Preventive Measures Before Signing an Agreement to Sell

To avoid future disputes, buyers should:

• Verify RERA registration number

• Check sanctioned plans and approvals

• Review possession timeline carefully

• Examine refund and cancellation clauses

• Retain copies of all communications

Developers should ensure realistic timelines, financial planning and proper disclosures.

Frequently Asked Questions (FAQs)

Q1. Can I cancel my flat booking due to delay in possession?

Yes, under Section 18 of RERA you may withdraw and claim refund with interest.

Q2. What interest rate is payable under RERA?

Usually SBI MCLR + 2%, depending on state rules.

Q3. Can I approach Consumer Court instead of RERA?

Yes. Remedies under RERA are in addition to consumer remedies.

Q4. Is there limitation period under RERA?

While RERA does not prescribe strict limitation, complaints should be filed within a reasonable period.

Conclusion

A breach of agreement to sell under RERA is not merely a contractual dispute it is a statutory violation under RERA. The law now provides structured remedies including refund, interest, compensation and enforcement of possession. Homebuyers must act promptly, document communications and seek legal advice where necessary. Developers, on the other hand, must adhere strictly to timelines and disclosures to avoid regulatory consequences.

RERA has transformed real estate transactions from opaque arrangements into regulated legal relationships grounded in accountability.

How NyayKart can help

If you are facing delayed possession, refund issues or unfair settlement offers, NyayKart provides end-to-end assistance: drafting legal notices, filing RERA complaints, representing you before consumer courts, negotiating settlements and executing refund recovery.

Book a free consultation to evaluate your case and get a tailored action plan.