The model builder-buyer pact

Contact Counsellor

The model builder-buyer pact

  • Recently, the Supreme Court stepped in to protect homebuyers from exploitation by builders who delay transfer of possession and often redraft delivery schedules.
  • The petition cited that the Real Estate Regulatory Authority (RERA) Act of 2016 had hardly been implemented.
  • The petitioner drew court’s attention to Section 41 and 42 of the RERA.

Real Estate Regulatory Authority (RERA) Act of 2016

  • RERA, 2016 is a central legislation which aims to regulate the real estate sector. It seeks to empower and protect property consumers and make transactions fair and transparent.
  • The RERA Act was enacted under Entry 6 and 7 (dealing with contracts and the transfer of property) of the Concurrent List of the Constitution of India
  • Enacted in March 2016, RERA came into effect from May 2017

Objectives of RERA

  • Enhance transparency and accountability in real estate and housing transactions.
  • Boost domestic and foreign investment in the real estate sector.
  • Provide a uniform regulatory environment to ensure speedy adjudication of disputes.
  • Promote orderly growth through efficient project execution and standardization.
  • Offer a single-window system of clearance for real estate projects.
  • Empower and protect the rights of home buyers.


  • Timely delivery of flats
  • Furnishing of accurate project details
  • Specifying carpet area: Generally, builders sell flats on the basis of built-in area, which includes a common passage area, stairs and other spaces which are 20-30% more than the actual flat area.
  • All clearances are mandatory before beginning a project: Builders often attract buyers with huge discounts and pre-launch offers. And, the buyer, enticed by the offers, does not bother about the clearance.
  • Each project should have a separate bank account: Developers raise funds through pre-launch offers and use them to purchase some other land or invest it in other projects.
  • After-sales service: As per an interesting clause in the Act, if the buyer finds any structural deficiency in the development of the building, the buyer can contact the builder for after-sales service.


  • Past real estate projects not included
  • Only new projects are covered by the Act.
  • Delay from government agencies
  • No compulsory regulation for projects less than 500 square meters:
  • New project launches expected to be delayed:
  • State governments regulated real estate before RERA as land and land improvement are in the State List of the Seventh Schedule of the Constitution.
  • RERA has been enacted under the Concurrent List.
  • This has increased the tussle between various states and centers over the implementation of RERA.