Builder demanding ₹5 lakh extra before possession, can he do this?

Question

I booked a flat in Noida in 2025 and paid 90% of the amount according to the agreement. Now, the builder is asking for an additional ₹5 lakh citing increased construction costs, threatening not to hand over possession otherwise. This was not in the original agreement. I am feeling helpless and don't know what to do. Can he legally demand this extra money? What are my options to handle this situation?

Adv. Arjun Menon · Accepted Answer

The short answer is the builder cannot legally demand extra money unless it is specifically provided for in your agreement. Here's the practical breakdown of what you can do.

1. Review Your Agreement: The first step is to carefully review your sale agreement or builder-buyer agreement. Look for any clauses that allow for escalation in costs or additional charges. If there is no such clause, the builder cannot unilaterally demand more money.

2. Check for RERA Registration: Since your property is in Noida, it likely falls under the purview of the Real Estate (Regulation and Development) Act, 2016 (RERA, 2016). Under RERA, builders are required to adhere to the terms of the agreement, and any changes in cost should be justified and agreed upon by both parties. The builder's demand for extra money without a basis in the contract could be a violation of RERA.

3. Legal Precedents: In the case of Fortune Infrastructure v. Trevor D'Lima (2018), the Supreme Court held that builders must adhere to the terms of the contract and cannot impose additional costs arbitrarily. This case can be a strong basis for your claim.

4. File a Complaint with RERA: If the builder is registered under RERA, you can file a complaint with the RERA authority in your state. They have the power to adjudicate disputes between home buyers and builders and can order a refund or ensure possession is given without extra charges.

5. Consumer Forum: You can also approach the Consumer Disputes Redressal Commission, alleging unfair trade practices. Under the Consumer Protection Act, 2019, you can claim compensation for the mental agony and harassment you are facing.

6. Legal Notice: If negotiations fail, consider sending a legal notice to the builder, demanding possession as per the agreement and warning against arbitrary charges. This can sometimes prompt the builder to comply.

The key thing to watch out for here is ensuring that you act within the limitation period. Generally, for consumer cases, it is two years from the date of the cause of action.

The most important thing right now is to gather all your documentation, review your agreement, and consult with a lawyer who can guide you through the RERA or consumer forum processes. Don't delay this.

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Adv. Ravi Kumar · Answer

I'm sorry to hear about your predicament. In situations like this, the key document is your original agreement with the builder. If the demand for additional payment is not stipulated in the agreement, the builder's demand is likely unjustified.

Here’s a step-by-step approach to address your situation:

Review the Agreement: Go through your sale agreement thoroughly. Check if there are any clauses that allow the builder to demand extra charges under specific circumstances. Generally, agreements should specify the total cost and payment schedule.
Check RERA Registration: Since your property is in Noida, it falls under the jurisdiction of the Uttar Pradesh Real Estate Regulatory Authority (UP-RERA). Ensure that the project is registered with RERA. You can find details on the Real Estate (Regulation and Development) Act, 2016. Under RERA, builders cannot make arbitrary demands for additional payments.
File a Complaint with RERA: If the builder's demand is not supported by the agreement, you can file a complaint with UP-RERA. They have the authority to adjudicate disputes between buyers and builders. The complaint can be filed online through their official website.
Legal Notice: Consider sending a legal notice to the builder through a lawyer, demanding adherence to the original agreement terms and threatening legal action if they fail to comply. This often prompts builders to reconsider their demands.
Consumer Court: If the builder persists, you can file a complaint with the Consumer Disputes Redressal Commission. Under the Consumer Protection Act, 2019, you have the right to seek redressal for unfair trade practices.

In Fortune Infrastructure v. Trevor D'Lima (2018), the Supreme Court ruled that builders cannot impose additional charges unilaterally. This precedent supports your position.

Be aware of any limitation periods for filing complaints — for consumer courts, it's generally two years from the date of the cause of action.

Act swiftly to preserve your rights and prevent further complications. If you need detailed assistance, consulting with a lawyer who specializes in real estate cases can provide further guidance tailored to your specific situation.

📚 References

Adv. Faisal Khan · Answer

I understand how stressful and frustrating this situation must be for you. It's unfair to face unexpected demands for additional payments, especially when you're so close to getting possession of your new home. The short answer is: No, the builder cannot legally demand extra money if it wasn't part of the original agreement you signed. Any such demand is typically considered a breach of contract. Let's break this down. Under the Indian Contract Act, 1872, a contract is binding and enforceable by law if both parties have agreed to the terms. If your agreement did not include provisions for additional charges due to increased construction costs, the builder's demand is not valid. Here are the steps you should take: Review your agreement carefully to confirm that there is no clause allowing the builder to demand additional payments under these circumstances. Send a formal written notice to the builder, preferably via registered post, stating that their demand is not in accordance with the agreement and that you expect possession as per the original terms. If the builder persists, you can file a complaint with the Real Estate Regulatory Authority (RERA) of Uttar Pradesh. RERA is designed to address grievances related to real estate and enforce builders' compliance with agreed terms. Consider filing a case in the consumer forum for deficiency in service and unfair trade practice if the builder continues to refuse possession. In my experience, builders sometimes rely on buyers' lac

Adv. Anand Murthy · Answer

I'm sorry to hear you're going through this. Let's break down what you can do in this situation.

Firstly, the core of this issue revolves around your agreement with the builder. If your original agreement or contract does not mention any clause allowing the builder to demand additional money due to increased construction costs, then the builder cannot legally make this demand. Contracts are binding, and both parties must adhere to the terms agreed upon.

Here are the steps you can consider:

Review Your Agreement: Carefully go through your original agreement to check for any clauses that might allow the builder to demand additional payments. If there is no such clause, the demand is likely unjustified.
Send a Legal Notice: You can send a formal legal notice to the builder, stating that their demand for additional money is not supported by the agreement. It is advisable to have a lawyer draft this notice to ensure it is clear and legally sound.
File a Complaint with RERA: Since your property is in Noida, you can approach the Uttar Pradesh Real Estate Regulatory Authority (RERA). RERA is a regulatory body established to protect home buyers and ensure builders adhere to their commitments. The Real Estate (Regulation and Development) Act, 2016 mandates builders to follow the terms of the agreement. You can file a complaint on their website.
Approach Consumer Court: If the builder refuses to comply, you can file a case in the Consumer Court for unfair trade practices. The Consumer Protection Act, 2019 provides a platform for consumers to seek redressal for grievances against sellers or service providers.

In the case of Fortune Infrastructure vs. Trevor D'Lima (2018), the Supreme Court ruled that builders cannot demand extra charges that are not part of the original agreement. This precedent supports your position.

Remember to act promptly, as there are time limits for filing complaints with RERA and Consumer Courts.

By following these steps, you should be able to address the issue effectively. If the builder continues to be unreasonable, these legal avenues can help ensure your rights are protected.

📚 References

Builder demanding ₹5 lakh extra before possession, can he do this?

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