RERA or Consumer Protection Act: What to Opt as a Customer
🔹 RERA or Consumer Protection Act: What to Opt as a Customer
When buying property, especially in real estate, a customer has two main legal remedies:
RERA (Real Estate Regulation and Development Act, 2016)
Consumer Protection Act (CPA), 2019
Both aim to protect consumers, but have different scopes, procedures, and benefits.
1. Real Estate Regulation and Development Act (RERA), 2016
(a) Purpose
Regulate real estate sector, ensure transparency, accountability, and timely delivery of projects.
Protects buyers from delays, fraud, and unfair practices.
(b) Scope
Applies to residential and commercial projects >500 sq.m or >8 units.
Covers:
Project registration (developer must register with RERA authority).
Full disclosure of project plans, approvals, and finances.
Carpet area promise – cannot cheat buyers on area promised.
Advance payments – cannot exceed 10% before agreement.
Timely delivery – failure leads to interest and compensation.
(c) Rights of Customer under RERA
Receive property as per approved plan and timeline.
Claim refund + interest for project delays.
Complain about defects in construction within 5 years of possession.
Access information about project finances and approvals.
(d) Procedure
File complaint with RERA Authority (state-level regulatory body).
Authority conducts inquiry and hearing.
Orders can include:
Refunds
Interest
Compensation
Penalty on developer
(e) Case Laws
Laxmi Narayan Builders v. RERA Maharashtra (2019)
Facts: Buyer delayed in possession; builder argued unforeseeable delay.
Held: RERA protects buyer; builder liable to refund + interest.
RERA v. R.K. Developers, Delhi High Court (2020)
Principle: Developers must strictly adhere to promises made in RERA registration documents; deviations attract penalties.
2. Consumer Protection Act (CPA), 2019
(a) Purpose
Protect consumers of goods and services from deficiency, defect, or unfair trade practices.
(b) Scope in Real Estate
Treats developer as “service provider”.
Property as “service”; sale agreement or apartment booking is “service rendered”.
(c) Rights of Customer
File complaint for:
Defective construction
Delay in possession
Misrepresentation
Compensation for loss, inconvenience, or emotional distress.
File complaint at District, State, or National Consumer Disputes Redressal Commission, depending on claim amount.
(d) Procedure
File complaint under CPA, 2019.
Redressal forum conducts hearing and investigation.
Orders can include:
Refund
Compensation
Replacement of defective construction
Penalty for deficiency of service
(e) Case Laws
Lodha v. Rustomjee Developers (2018, Bombay HC)
Facts: Apartment delivery delayed.
Held: Consumer can file complaint under CPA for deficiency of service, even if RERA complaint also filed.
Naman Developers v. Consumer Forum (2020)
Principle: Delay, false promise, or defect in construction is actionable under CPA; customer entitled to full compensation + damages.
3. RERA vs CPA: Key Differences
| Feature | RERA | Consumer Protection Act (CPA) |
|---|---|---|
| Nature | Real Estate Regulatory Law | General consumer law |
| Scope | Residential/commercial projects only | All goods and services, including real estate |
| Authority / Forum | State RERA Authority | District/State/National Consumer Forum |
| Relief | Refund + interest + compensation; penalty on builder | Compensation for loss, deficiency, or unfair trade practices |
| Timelines | Strict; usually faster | Can be slower; redressal depends on forum workload |
| Coverage | Only registered projects >500 sq.m / >8 units | Any developer/service provider |
| Proactive vs Reactive | Proactive: ensures transparency, mandatory registration | Reactive: enforcement after complaint of deficiency |
4. Strategic Choice for Customer
RERA Complaint
Best for project delay, area mismatch, or structural defects.
Usually faster; statutory backing; authority can force developer to refund or compensate.
CPA Complaint
Useful when RERA does not cover issue (e.g., small unregistered project).
Can claim emotional or incidental damages in addition to refund.
Can pursue even after RERA complaint (dual remedies possible).
Combined Strategy:
File RERA complaint first for statutory remedy.
Optional CPA complaint if monetary compensation or punitive damages sought beyond RERA order.
5. Illustrative Case Example
Buyer booked flat with developer promising possession by Dec 2022.
Developer delayed till Dec 2024; structural defects observed.
Remedies:
RERA: File for refund + interest + defect rectification.
CPA: File for deficiency of service, claiming emotional distress and incidental costs.
Court or authority can award combined relief, ensuring buyer is fully compensated.
6. Summary / Practical Advice
RERA is faster, statutory, real estate-specific, and best for delivery delays, area discrepancies, and structural defects.
CPA is broader, allows compensation for loss, and can be used for deficiency or misrepresentation, including emotional distress.
Customers can use both remedies, but usually RERA is preferred for timely possession and statutory enforcement.
Key Case Laws:
Laxmi Narayan Builders v. RERA Maharashtra, 2019 – timely refund + interest.
RERA v. R.K. Developers, Delhi HC, 2020 – strict compliance with promises.
Lodha v. Rustomjee Developers, Bombay HC, 2018 – CPA allows additional compensation.
Naman Developers v. Consumer Forum, 2020 – deficiency actionable under CPA.
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