Legal Remedies for Stalled Project under RERA


Status as on- 16/07/2020

Practical Issues

As per our research, there are more than 5 Lakhs of units, which are in stalled project or long delayed project. There would be multiple reasons for such projects however the maximums projects are delayed or stalled due to diversion of money or unprofessional decisions of the builder. Whatever the reason, but along with homes/project, the dreams of homebuyers have struck there.

Homebuyer have tried all kind of legal remedies like Complaint to RERA authority, Consumer court Case, Conciliation, arbitration etc, however, even after the favorable orders from such authorities, there has been no change in the status. Above all, the banks for home loan increase their pressure for EMI.

Lets understand the reasons and why such orders are not being implemented and changing the picture:

Most of the projects are struck due to following reasons:

  • The builder has invested the collected amount in another projects
  • The builder has done fraud and invested the collected money in other business or used for personal purpose
  • The builder has run away or not traceable
  • Project is on the disputed land or subject to subject regarding the construction map and others
  • Project has not been sold up to break even point and collection has been slow
  • Due to some temporary issues, the construction is struck

Except last point, in almost reason, the main issue is of money to be used for further construction. The individual order of RERA or other court does not put any hard pressure on the builder to sell of the other assets and complete the construction. Hence the builders are not much worried.

Further, since the subjected home for home loan has not been constructed the bank can’t auction it and hence they adopt different ways to recover the money from the homebuyers.

The question is now whether you have lost that money or there is some justice that you can claim as aggrieved homebuyer of an abandoned project?

Legal Solution

There is an old saying that Unity is strength, division is weakness.

Since the individual complaint order are not able to make the pressure and take away the project from the builder, but can be done by unity.

Section 8 Real Estate (Regulations and Development) Act, 2016

The answer to this question lies in Section-8 of recently implemented RERA. This Section has not been explored well nor has been understood well by many aggrieved buyers. The Section in itself very well covers situations where project has been stalled or abandoned. It states that in such situation, the homebuyers can form a registered or unregistered association and takeover the project and complete it by themselves.

RERA Act, 2016 was implemented w.e.f. 01/05/2017 with the motive to protect the interest of buyers. As per section 8 of RERA Act, if any builders is not able to complete the project, Then RERA authority with consultation of respective State Government, may handover the project to the association of allottees for the remaining development work.

Now, the other set of questions that may arise in your mind is what about funds or what about other things how will be other things such as incomplete construction can be managed? Has this been done before?

It would depend upon project to project but one thing for sure is that the builder would get fear of going the project assets from its hand. Hence he would be come on table to complete the project or propose the solution. For example-


The answer to these questions is YES, it has been done before in the landmark matter of RWA vs Piyush Heights by the Haryana RERA – Panchkula, which was argued by our esteemed Centrik firm. The Authority provides all support, monitors the actions and even allows sale of unsold flats in order to raise capital or money for unfinished construction.

It has well-regulated process done by the RERA Authority and is boon or stalled projects.

Thus, do not loose hope and think that your money and flat has been lost forever rather take things in your hands. RERA was implemented to empower the home-buyers and it has tried it best to cover all scenario in its provisions and stalled projects being very clearly covered under Section-8. Therefore, as buyers you should be vigilant of your rights so that in worst scenario of stalled project also you can take action. The author can be reached at

Disclaimer – The above articles is based on the personal interpretation of RERA and related laws. The readers are expected to take expert advice before putting reliance on it. For any clarification and issue please reach us at

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