A landmark intervention by Telangana RERA (TG RERA) has reinforced that builders cannot demand amounts beyond the registered agreement before handing over possession of a flat. In a significant order, the authority directed a developer to immediately hand over the apartment to the homebuyer and warned that any repetition of such practices with other buyers could invite stringent financial penalties.
This decision strengthens the rights of homebuyers and reiterates the importance of transparency, compliance with the agreement for sale, and adherence to RERA provisions.
Background of the Dispute
Software engineer P. Krishna Mohan Rao booked two flats in the Aaditri Empire project near Velimela Exit No. 2, Outer Ring Road, Kokapet, in 2019.
Although the flats were booked in 2019, the project faced delays due to statutory approvals, and construction commenced only in 2025. During this period:
- The developer allegedly delayed RERA registration.
- The project was initially planned as G+13 floors.
- Subsequently, the developer sought approval for G+17 floors after acquiring additional land.
- Approval delays further postponed the project.
Builder Demanded Additional ₹5 Lakh
When the buyer approached the developer regarding registration of the flat, he allegedly received two demand letters seeking an additional ₹5 lakh, over and above the amount agreed in the registered agreement.
The developer allegedly informed the buyer that:
- Registration would not proceed unless the additional amount was paid.
- Possession would also be delayed.
The buyer refused to make the unlawful payment.
Complaint Before TG RERA
Instead of yielding to the demand, the buyer approached TG RERA in September 2025 with:
- Agreement documents
- Payment receipts
- Signed acknowledgements
- Other supporting evidence
The buyer stated that he had carefully preserved every receipt bearing the signatures of the company’s chairman and director, which significantly strengthened his case.
Developer Admitted the Mistake
During multiple hearings before TG RERA:
- The developer’s advocate admitted that the company had committed an error.
- Time was sought to rectify the issue.
- The authority took serious note of the conduct.
The buyer also alleged that the builder attempted to collect GST twice.
During the hearing, the TG RERA bench questioned the developer regarding the legality of collecting GST twice and categorically prohibited any such additional collection.
TG RERA’s Directions
The Authority directed the developer to:
- Immediately register and hand over the flat.
- Stop demanding any amount beyond the agreement value.
- Refrain from collecting duplicate GST.
The Authority further warned that:
If similar complaints are received from other buyers, heavy financial penalties may be imposed on the developer.
Following the proceedings, the flat was successfully registered in March 2026.
Important Lessons for Homebuyers
This case offers several important lessons.
1. Preserve Every Document
Homebuyers should always preserve:
- Agreement for Sale
- Payment receipts
- GST invoices
- Bank payment proofs
- Email communications
- WhatsApp conversations
- Demand letters
Strong documentary evidence often determines the outcome of disputes before RERA.
2. Never Pay Illegal Demands
A builder cannot arbitrarily demand:
- Additional sale consideration
- Unagreed charges
- Duplicate GST
- Hidden costs
unless they are legally payable under the agreement and applicable law.
3. Verify RERA Registration
Before purchasing a property:
- Verify that the project is registered with the respective State RERA.
- Review approvals and project details.
- Examine construction timelines.
Purchasing in a registered project provides greater legal protection.
4. Approach RERA Without Delay
If a builder:
- Refuses possession,
- Demands illegal payments,
- Delays registration,
- Violates the agreement,
buyers should immediately approach the State RERA with supporting documents.
Can a Builder Demand More Money After Signing the Agreement?
Generally, No.
Once an Agreement for Sale has been executed, the builder is bound by its terms.
Any additional demand must have:
- contractual basis,
- legal justification, and
- compliance with applicable law.
Arbitrary monetary demands made as a condition for possession or registration may amount to an unfair trade practice and can be challenged before RERA.
Role of RERA in Protecting Buyers
The Real Estate (Regulation and Development) Act, 2016 was enacted to:
- Protect homebuyers.
- Ensure transparency.
- Prevent diversion of funds.
- Enforce project timelines.
- Regulate builders.
- Provide speedy dispute resolution.
Authorities across India have increasingly taken strict action against developers violating buyer rights.
Key Takeaways
- Builders cannot demand arbitrary additional amounts beyond the agreed sale consideration.
- Duplicate GST collection is impermissible.
- Maintaining proper documentation significantly strengthens a buyer’s case.
- RERA provides an effective remedy against unfair practices by developers.
- Homebuyers should verify RERA registration before investing and promptly approach the Authority in case of violations.
Conclusion
The TG RERA order serves as a strong reminder that developers must honour the agreed terms of sale and cannot use possession or registration as leverage to extract additional money from homebuyers. It also highlights the importance of preserving documents and seeking timely legal remedies. With increasing regulatory oversight, RERA continues to play a vital role in promoting fairness, transparency, and accountability in India’s real estate sector.
