How to handle demand letter by Builder


Status as on- 05/05/2021


The Indian real estate sector is in a very bad picture for a long time. There are many problems faced by the homebuyers in real estate business. People are in continuous fear and therefore doubt to invest in a project looking at the frauds and scams done by the big developers. The kind of insecurity that homebuyers deal with after investing in a project is caused because of the lack of commitment from the builder’s side. Even after making huge investments, buyers find themselves in a trap.

Some of the issues faced by the homebuyers are –

  • Fake promises to lure homebuyers
  • Demand letter without development
  • Arbitrary Builder buyer agreements
  • No development at project site
  • Unnecessary burden of Pre EMIs
  • Possession without OC/CC
  • Transfer of project to third entities

Receiving continuous demand letters without any development in the project is another issue of concern for homebuyers. Let’s talk about the same.

What is Demand letters & its use?

For those who don’t know, a demand letter is a formal document sent by the builder to another homebuyer asking for payment for unit allotted.

So, in this scenario, the builder, according to the payment plan set up in the BBA, sends demand letters to the homebuyers seeking payment for the development of the project. The homebuyers make payments accordingly after receiving such demand letters at the initial stage of the deal. After sometime, you realize that there is no work done at the construction site even after making all the payments on time as per the payment plan. There would be an end number of reasons given by the developer in this regard and this is how you start feeling cheated. Even after observing the slow pace work at the project site, you keep on making payments after receiving the demand letters in the hope to get possession of your unit one day.

Then there comes a time when reality hits you hard and you realize that there is no scope of getting the possession on time as there is still more than 50% of work left which can’t get completed sometime soon in future. Now when you stop making payments on receiving fresh demand letters, builder starts threatening you to cancel your booking without refunding a single penny of the payment made till date and the chaos continues.

Points to check in Demand Letter

Once if you recived the demand from your builder, you need to check the following points

  • Whether the demand is as per the payment plan agreed at the time of sale ?
  • Whether amount has been computed correctly?
  • Whether construction has been completed to raise the demand as agreed ?
  • Whether any change in the taxes or other charges ?
  • Whether any interest has been levied for the delay ?
  • Whether there is any change in the term and conditions?

Revised Demand Letter

Another kind of exploitation faced by the homebuyers is receiving revised demand letters. The builder maliciously adds new charges in the payment plan without even letting know the buyer. These extra charges might cover some super area or any other facility which you don’t even require. This might give rise to your total sale consideration. You were already in a burden of paying Pre EMIs & EMIs and now these extra charges give you a double blow. Mostly, such clauses are added in the BBAs which talk about revised charges. Therefore, it is very important to go through the builder buyer agreement at the initial stage of the deal very vigilantly. If you find any of the clauses arbitrary that gives a sense of putting you in trouble in future, don’t rush to get it executed.

Legal Remedy

Even after making all the efforts possible, you still find yourself in a trap then file a RERA complaint against any such builder as soon as possible. You can file a complaint before RERA Authorities either for possession along with a delay penalty or for refund along with compensation. You can also knock the doors of NCLT if you are a group of 100 homebuyers or 10% of the total homebuyers of such projects. Right legal advice plays a very important role in showing you a right legal path with an effective remedy.


Disclaimer– The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinions before relying upon the article. For more information, please contact us at

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