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Consumer Protection in Real Estate

Ensuring Fairness in Real Estate HARERA’s Landmark Ruling

The Haryana Real Estate Regulatory Authority recently ruled against builder for breaching consumer trust and engaging in fraudulent practices. The dispute arose from builder’s miscalculation of price of a property, stemming from the improper use of area measurements.

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In this case consumer had applied for a commercial shop within the builder’s project named “Signum-93” in Gurugram. The consumer, under specific terms, agreed to a basic sale price of Rs. 9400 per square foot, along with additional charges totaling Rs. 604 per square foot. However, upon allocation of the shop, discrepancies emerged regarding the pricing, with the builder charging higher amount than agreed upon.

Further complicating matters were delays in possession of the unit, which was promised by a certain date but was not delivered on time. Additionally, issues arose concerning the accuracy of the Final Statement of Account and the imposition of unjustified charges by the builder.

During a site visit, HARERA discovered discrepancies between the specified super built-up area and the actual carpet area of the unit. This discrepancy led to a significant overestimation of the property’s value, resulting in financial harm to the consumer. Despite the consumer’s request for corrections, the builder issued a notice of cancellation instead of addressing the concerns raised.

The builder contended that the consumer knew the unit’s cost, received invoices and made the payments without raising any objections. Additionally, the builder cited external factors such as construction bans and the COVID-19 pandemic as reasons for delays in project completion.


HARERA’s verdict was unequivocal. The authority found the builder guilty of miscalculating the property price: Rs. 12,52,100 instead of Rs. 5,86,525. HARERA declared the offer of possession invalid due to an increase in carpet area. There had been increase in carpet area of unity by more than 15% which exceeded the permissible limit of 5%. The builder’s cancellation of the allotment was also deemed invalid. Because complainant made no default in payment. Consequently, HARERA ordered a refund of Rs. 10,25,372, with 10.85% interest per annum, to the consumer.

Therefore, HARERA directed the builder to refund the amount received from the consumer, along with interest at the prescribed rate. This ruling not only vindicated the consumer but also served as a stern warning to builders engaging in deceptive practices. HARERA’s decision underscored the importance of transparency, fairness, and consumer protection in the real estate sector, setting a precedent for similar cases in the future.

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Payal Sharma

Payal Sharma

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