The Real Estate Regulatory Authority (RERA) was created to bring transparency, accountability, and fairness into the real estate sector. It works as a safeguard for homebuyers, ensuring that builders comply with the commitments they make. However, if you discover that your builder has been blacklisted by RERA, it is important to know the right legal and practical steps to protect your money and property. Below is a complete guide on what you can do if your builder is blacklisted.
Step 1: Confirm the Builder’s Blacklist Status
Your first move should be to officially verify whether the builder has in fact been blacklisted. This can be done by visiting the RERA website of your state and checking the builder’s registration profile. Look for any orders, penalties, or cancellation notices issued against them. You can also download copies of such RERA orders for your personal record, as they will be crucial in case you need to file a complaint or pursue legal remedies later.
Step 2: Review the Project’s RERA Registration
Even if the builder has been blacklisted, the particular project you invested in may still hold valid registration under RERA. Visit the RERA portal to check the project details, its current registration status, and whether any special directions have been issued to ensure its completion. If the project remains registered, buyers enjoy additional legal protection under RERA, and the authority may even intervene to safeguard your interest.
Step 3: File a Complaint Before RERA
If the builder has delayed possession, failed to deliver on promises, or violated the agreement, you have the right to file a complaint with RERA. This can be done online through your state’s RERA portal. While filing, you should provide details such as the project name, the developer’s details, and the specific grievance you are facing. Supporting documents—such as the allotment letter, builder-buyer agreement, payment receipts, and any communication exchanged—should also be attached. RERA has the power to issue binding directions ensuring that builders stick to their commitments.
Step 4: Approach the Consumer Forum
In situations where RERA’s action does not bring satisfactory relief, buyers can escalate the matter to the Consumer Disputes Redressal Commission (CDRC). Depending on the amount of your claim, you can approach:
- The District Forum for claims up to ₹1 crore,
- The State Commission for claims between ₹1 crore and ₹10 crore, and
- The National Commission for claims exceeding ₹10 crore.
This ensures that buyers have another strong platform to seek justice and compensation for delays or financial losses caused by the builder.
Step 5: Consider Legal Remedies in Court
If the builder refuses to comply or is involved in fraudulent activity, you may need to pursue legal action. The first step is usually sending a formal legal notice through an experienced real estate lawyer. If the issue persists, you can file a case in civil court seeking a refund, compensation, or possession of the property. In extreme cases of fraud or cheating, a criminal complaint can also be lodged under the Indian Penal Code (IPC) to hold the builder accountable.
Step 6: Approach NCLT in Case of Insolvency
If the builder is financially insolvent and unable to continue construction, buyers can approach the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC). Since homebuyers are recognized as “financial creditors,” they can file for insolvency proceedings. Once admitted, an Insolvency Resolution Professional (IRP) may be appointed to manage the developer’s assets and attempt to complete the project through alternate means.
Step 7: Form a Homebuyers’ Association
When multiple buyers are affected, it is often more effective to act collectively. Forming an association of homebuyers gives you stronger representation before RERA, NCLT, or courts. Collective action not only increases your bargaining power but also ensures that authorities take the case more seriously, thereby accelerating the resolution process.
Step 8: Explore Your Remedies
Depending on the situation, different solutions may be available. If the project is only delayed, you may be entitled to interest or compensation. If the builder is blacklisted but the project is ongoing, RERA may step in to oversee its completion. In cases where construction is completely stalled, buyers can demand a refund with interest. And if the builder is declared insolvent, resolution can be sought under the IBC framework through NCLT.
Step 9: Check for Alternate Developer Appointments
In some cases, RERA or courts may appoint another developer or agency to complete the unfinished project. Buyers should regularly track announcements from RERA regarding such developments, as this may directly affect the delivery of their homes.
Step 10: Keep Monitoring RERA Orders
Since regulatory actions are ongoing, it is wise to stay updated with the latest RERA orders and directions related to your builder and project. This helps you remain aware of any new opportunities for relief, changes in project status, or penalties imposed on the builder.
Final Thoughts
Discovering that your builder has been blacklisted by RERA can be stressful, but the law provides multiple remedies to protect homebuyers. From filing a complaint with RERA to escalating the issue before consumer forums, civil courts, or even NCLT, buyers are not without recourse. Acting promptly, gathering evidence, and working collectively with other affected buyers can make a significant difference in securing justice.
