Telangana RERA Orders Builder to Compensate Homebuyer for 18-Month Delay in Flat Possession and Debris Fee
Telangana’s Real Estate Regulatory Authority (RERA) has ordered a builder to compensate a homebuyer for a significant delay in possession of a flat. The builder failed to deliver the property on time, pushing the possession date back by 18 months and imposing an unexpected debris charge of Rs 30,000. RERA found that the builder did not meet its obligations under the Agreement of Sale and the RERA Act, dismissing claims that the delay was due to the Covid-19 pandemic.
Case Background
The homebuyer purchased a flat priced at Rs 44.36 lakh after reviewing the builder’s advertisement and website. An Agreement of Sale was signed, with the builder promising possession by December 26, 2024, and an extended grace period until August 2025. The buyer paid Rs 40.32 lakh, which included charges for amenities and parking. However, the builder frequently changed the possession timeline and failed to provide clarity on construction completion and the availability of amenities. The additional debris charge was not disclosed in advance and was not part of the original agreement.
The builder claimed that the project was nearly 85% complete and that the debris charge had been reduced to Rs 20,000 per flat after discussions with homebuyers. The homebuyer argued that the delay caused financial strain, as he was paying both a home loan EMI and rent. He sought interest compensation from RERA under the provisions of the Act.
Builder’s Defense
In its defense, the builder attributed the delay to various challenges, including labor shortages, Covid-19, and legal issues related to encroachment. The builder invoked the force majeure clause, stating that these factors significantly impacted the construction schedule. It also mentioned that the Telangana High Court had allowed construction to proceed in certain blocks, and the HMDA confirmed that only minor issues needed rectification.
The builder extended the deadline for completion to December 18, 2026, which meant possession would be delayed by more than 18 months from the original timeline. On August 25, 2026, RERA ruled in favor of the homebuyer, ordering the builder to pay interest compensation at a rate of 10.7% for the delay.
RERA’s Ruling
RERA rejected the builder’s claims regarding Covid-19, noting that the Agreement of Sale was executed in February 2023, well after the pandemic’s peak. The authority emphasized that the builder had committed to the possession date with full knowledge of the project’s circumstances. RERA also dismissed the additional debris charge, stating it was not included in the Agreement of Sale and violated the builder’s obligations under the RERA Act.
The authority determined that the builder’s failure to deliver the flat by the promised date constituted a breach of contractual and statutory obligations. RERA stated that the homebuyer could seek further compensation for mental distress and financial loss by filing an application under the RERA Act. The builder was directed to pay the interest compensation calculated on the amounts already paid by the homebuyer, starting from June 26, 2025, until the flat is delivered. The builder must clear the interest arrears within 60 days of the order.
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