Docs to delayed complaint: Why homebuyers lose legal fight against builders

Another reason for buyers weakening their own case is making inflated or unrealistic claims

Haryana Real Estate Regulatory Authority (Rera) recently dismissed a homebuyer’s compensation claim against a builder for delayed possession, citing late filing. Although the buyer received possession in September 2020 — four years after the promised date of June 2016 — he filed the complaint only in April 2024. Rera ruled that a three-year window is a reasonable period to initiate such cases.

 

This is not the first such instance. Several cases in the past have seen homebuyers’ claims against builders rejected by courts due to insufficient proof or mistakes on buyers’ part.

 

Weak documentation

 

Many homebuyers lose Rera cases not due to lack of merit but because of poor documentation. “Key records like the builder-buyer agreement, payment proofs, delay-related correspondence, and objections before possession are often missing,” says Nidhi Singh, partner, IndiaLaw LLP.

 

Signing handover documents with satisfaction clauses further weakens their case.

 

“To safeguard their rights, buyers must preserve all relevant documents — from allotment letters and receipts to protest emails and possession papers. Without this paper trail, even genuine complaints are easily dismissed,” says Singh.

 

Inflating compensation claims

 

Many buyers weaken their own case by making inflated or unrealistic claims — such as arbitrary amounts for mental agony or speculative opportunity loss — assuming that the authorities will accept whatever they state. However, claims based on emotional distress, speculative losses, or arbitrary amounts are usually dismissed or viewed with scepticism.

 

“Such overreaching damages their credibility and can lead to outright dismissal or significantly reduced compensation by the tribunal or authority. Being reasonable and precise resonates better with decision-makers and usually leads to far more positive results,” says Kshitij Bishnoi, partner, CMS IndusLaw.

 

Failure to demonstrate hardship

 

Demonstrating actual hardship or financial loss is absolutely critical in compensation-for-delay cases under Rera. “Only showing that possession was delayed is not sufficient, especially if the buyer has already accepted the unit, signed handover documents, or did not object for years. The aspect that strengthens a buyer’s case is the proof that the delay is real and has caused measurable damage,” says Singh.

 

“Courts, Rera, and consumer forums consistently require clear evidence of actual loss or inconvenience — without which claims are often dismissed or reduced,” says Bishnoi.

 

Rent receipts and lease agreements, EMI payment proofs, medical or personal emergencies are a few kinds of evidence that can make a strong case for compensation due to delay.

 

Approaching the wrong forum

 

Many homebuyers approach the wrong forum, largely due to a lack of awareness about jurisdictional boundaries and procedural nuances. “To cite an example, a buyer may approach Rera for compensation, when such monetary claims —especially those exceeding Rs 1 crore — are better suited for the National Consumer Disputes Redressal Commission,” says Soumya Banerjee, partner, Aquilaw.

 

“Rera is best for delays in possession and claims for interest or penalties under the Act. Consumer forums are suitable for refunds, compensation for mental agony, construction defects, or service deficiencies, while civil courts handle the complex cases of title disputes, ownership issues, and injunctions involving the project or unit,” says Bishnoi.

 

Some cases may need a combination of forums or a hybrid strategy, especially where arbitration clauses apply. Misfiling often results in delays, dismissal on jurisdictional grounds, or redirection, which can waste months if not years.

 

Ignoring builder-buyer agreement

 

Many buyers skip or misunderstand key clauses in builder-buyer agreements, putting themselves at a disadvantage during disputes. “These contracts often include one-sided terms on possession timelines, delays, penalties, and compensation waivers that buyers unknowingly accept. Since courts treat these agreements as binding unless proven unfair, it is crucial to review them carefully, ideally with legal help,” says Banerjee.

 

Filing individually instead of in group

 

Filing complaints individually in large housing projects can also weaken a buyer’s bargaining power and reduce the efficiency of legal redressal. “Authorities like Rera and consumer forums are more likely to take serious note of group grievances as they reflect systemic failure rather than isolated dissatisfaction. When multiple buyers unite to file a joint complaint, it creates pressure not only on the builder but also on the forum to expedite the matter, often resulting in collective settlements or stronger penalties,” says Banerjee.

 

Skipping legal notice

 

Skipping a legal notice often means missing out on an early, amicable solution. “Well-crafted legal notices frequently bring builders to the table — sometimes resolving issues without protracted litigation. If litigation does follow, a notice strengthens your case by demonstrating seriousness,” says Bishnoi.

 

Forums have also become strict about limitation periods. Even genuine grievances get thrown out if they are not filed on time. The recent case against Emaar MGF Land is a prime example. Consumer courts also follow a strict two-year limitation period from the date the cause of action arises—typically starting from the promised date of possession.

 

Buyers should not wait passively if there is a delay or breach. They should consult a real estate lawyer promptly. “Equally important is maintaining a complete record of all relevant documents, such as booking forms, payment receipts, emails, and promotional material like builder brochures. Calculating the limitation period accurately is critical, as missing this window can mean losing the right to pursue any legal remedy at all,” advises Adnan Siddiqui, partner, King Stubb & Kasiva, Advocates and Attorneys.

 

Steps to take before filing complaint

 

Consult a real estate lawyer early; don’t wait for trouble to escalate

 

Send a strong legal notice to assert your claim

 

Keep all records — emails, chats, receipts, screenshots

 

Try settlement or mediation to save time and cost

 

Source: King Stubb & Kasiva, Advocates and Attorneys