Stuck in Subvention Schemes? Remedies under RERA


The realty developers or the builders every other day are coming up with new schemes so as to attract the home buyers. These schemes are being portrayed in such terms that one cannot move without availing benefits of the same, which adds to the unscrupulous benefits of the developer. One of such schemes is the Subvention Scheme, which supports the home buyer financially to invest in a property. But are these schemes even benefitting the home buyers or causing great losses to them? Let’s have an overview of the same.

What is a Subvention Scheme?

Under the Subvention scheme, a home buyer has to initially pay only 10-20% of the price of the property. Thereafter a three-way contract or a tripartite agreement is entered into between the home buyer, the developer and the bank from which loan is availed. While the construction is under progress, the developer pays the interest on the loan availed. As the construction of the project progresses the loan amount is transferred to the account of the developer. The Easy Monthly Installments [EMI’s] of the buyer begins only after he gets the possession of the property purchased. In some of the agreements in case the home buyer however wish to withdraw from the project they may do say by rendering a notice on the developer, who as per the agreement buy back the property from the buyer by paying back the initial amount paid along with any interest or penalty, if any, to the bank.

Problems which home-buyers are facing under the subvention scheme

In the present scenario many developers are flouting the terms and conditions of the tripartite agreement, by not paying the interest after a specified period of time since the construction of the project has been abandoned. Further when the home buyers serve notice to withdraw from the project their requests are being unheard, which leaves the home buyer in a pitiable position as the buyer neither has the funds to pay the amount of interest or let go of the initial payment made and on the top of the same the bank is persistent upon the recovery of the interest. Moreover, builders also do not keep the promise of buying back the property in case of the default.

Remedies under Real Estate (Regulation and Development) Act, 2016

In furtherance to the above discussion, now the question arises where a person should go when the project under the subvention scheme is stalled and home-buyers are obligated to pay the EMI’s because funds were transferred to the builder or developer on their financials.

Real Estate (Regulation and Development) Act, 2016 implemented in May 2017 and since then people who are aggrieved and have issues related to the Real Estate matter can take up their grievances before the Real Estate Regulatory Authority of the State;

And in the cases of subvention scheme RERA Authority has the power to decide and dispose of the matters if any of the aforesaid mischiefs happens. As per the provisions of the RERA Act, if builder is not giving possession on time then a complaint can be filed before RERA Authority to redress the grievance. In other instances, where builder is not paying EMI, s under the subvention scheme, Builder is not buying back the property as promised in the terms and conditions of the subvention scheme agreement or cancellation of the allotment, a home-buyer has a legal right to file a complaint to get the legal recourse.

At last, we can infer that in case of subvention scheme if any of the buyer is troubled due to the non-performance of the builder then RERA can play a pertinent role to bring the justice.

Disclaimer – Please note that the above articles is based on the interpretation of related laws and judicial pronouncement which may differ from person to person. The reader are expected to take the expert opinion on the matter.


  1. What if bank presented the cheque in owner’s account under subvention scheme and cheque got dishonoured and owner not yet received the property after scheduled period us over?

  2. HI,

  3. Hi,

    Need some inputs on subvention scheme provided. I’ve given the booking token. Below is the summary of initial promise & clarification on Pre EMi payment captured in tripartite agreement.

    1. Builder initially promise :- To pay Pre EMI on buyer behalf to Bank till possession as per subvention scheme.

    2. Tripartite Agreement :- Builder would be liable to pay pre emi to bank for initial 17 months only. Buyer would be solely liable after that. But possession date is 4 years from now as per Rera & Sale agreement.

    3. Builder clarification on above diff from initial promise:- We will be paying interest till Handover for interiors and the timeline mentioned in Bank tripartite agreement format would be as per the dates approved by them and for balance periods we will issue a confirmation on our letterhead.

    Is such letterhead confirmation enough to take any legal action against builder in case of any breach ?
    Awaiting for your reply.

    Kind regards
    Madhusudan K

  4. Hi,
    I have booked a flat in Noida extension under subvention scheme through indiabulls in 2015. The project is delayed by 3 years.
    I have filed an complaint through UPRERA in Jan 2018. It has already passed the order in my favor for refund with interest in Jul 2018. Builder didn’t comply with the order. After that I have applied for order execution in RERA. I have been paying the EMIs since Feb 2017.
    Can I stop my EMI showing RERA order as proof? Will it affect my cibil report?
    Please advice.

    1. Sir, based on the brief facts, NCLT may be the right and quick legal solution for getting your money back. however, for final legal advise we need complete details. you can send us at or speak to our expert at 8383011629

    2. There is a separate agreement with the bank. If the bank take note of order of RERA and ask the loan from Builder then only, you would be unaffected otherwise you would have every effect. For more details, please speak to our expert at 8383011629

  5. I have booked a flat in Greater Noida under subvention scheme where i need not to pay interest until Apr 2020 after obtaining loan from bank. Paying interest of my loan amount until Apr 20 to the bank is responsibility of builder and builder has been paying interest as per their commitment/ contract. However, the builder now asked me to pay the difference in NPV charges which he defines change in ROI (rate if interest) by bank stating Tripartie agreemet was sign on 8.40% in September 2017 and now ROI is 9.75% . Therefore, my query is, if as customer I am not responsible for paying interest charges till Apr 2020, then why I would pay the difference in ROI to the builder. Request guide me on this issue, whether builder raised legitimate demand or he is wrong on this issue

  6. Hi, I have booked a flat in pre launch, which had a subvention scheme where for 18 months, I was not required to pay any EMI but now the builder is saying that government has asked banks to stop subvention scheme so no such scheme is available, I have already paid 5% of property amount, when I asked refund I was said that no refunds will be given to me. I want to know what remedies I have in this case.

  7. Hi,
    I booked a flat in greater Noida west under sub vention scheme in Dec 2016, with the clause of no emi until possession. My Subvention period is over with bank and I am now paying Pre Emi which is to be reimbursed by the builder, per agreement. As per my agreement with builder, possession was due in sep 2019 with additional grace period of 6 months, that gets over on March 2020. Builder has been reimbursing my Pre emi amount to me since he promised no emi until possession however has now started getting late with those. They also mention 10% penalty, if I raise request for cancellation. What options do I have as project is not yet completed and I do not see the same happening for atleast another 6 months.

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