Navigating the Real Estate Market: 5 Pitfalls Homebuyers Must Avoid

Discover the top five mistakes homebuyers often make in India's real estate market and how to avoid them. Insights from experts like Sanjay Mandava and Maneesha Kongovi highlight the importance of due diligence and understanding RERA regulations.

Real EstateReraHomebuyersProperty MarketDeveloper MalpracticesReal Estate NewsMay 17, 2025

Navigating the Real Estate Market: 5 Pitfalls Homebuyers Must Avoid

Real Estate News:India's property market is fraught with challenges for homebuyers, from securing affordable home loans to dealing with project delays and developer malpractices. The Real Estate (Regulation and Development) Act (RERA) was implemented to provide significant protection for property purchasers' rights. However, even with RERA in place, homebuyers must remain vigilant to avoid common pitfalls.

RERA: A Guard Against Malpractices

Since its inception, RERA has been a strong advocate for homebuyers, often directing developers to compensate for delays or mismanagement. Sanjay Mandava, Founder and CEO of Landeed, emphasizes that while RERA establishes a robust framework to tackle builder-induced delays, some exceptions do exist. These exceptions typically involve factors related to the actions of the buyer, the developer, or unforeseen matters such as government policies and force majeure events.

Limitations of RERA

RERA's protections primarily apply to projects underway or commenced after its enforcement. This leaves buyers of pre-RERA projects with limited options. Maneesha Kongovi, a partner at IndusLaw, notes that older project complaints can only be made concerning breaches of specific obligations. Challenges on issued plans or occupancy certificates are often not entertained by RERA. Additionally, properties under 500 square metres or containing fewer than 8 units may not fall under RERA's jurisdiction, pushing buyers to seek redress in consumer or civil courts.

Buyers Beware: Common Pitfalls

1. **One-sided Agreements**: Potential homeowners should be wary of developer practices. Pranav Gupta, a legal advisor, warns that buyer agreements often feature one-sided clauses favoring developers, which can preclude future claims if not carefully reviewed.

2. **Cash Transactions**: Cash transactions, frequently employed to sidestep stamp duty, can compromise the buyer's legal position if refunds become necessary. Gupta advises that such transactions undermine a buyer's standing under RERA.

3. **Payment Defaults**: Payment default issues can exempt builders from liability for delays, potentially resulting in penalties or forfeiting compensation rights. Mohit Adatiya from NPV Insolvency stresses the importance of carefully examining payment schedules to ensure financial obligations are met.

4. **Modifying Project Timelines**: Modifying project timelines without legal advice might hinder buyers from claiming penalties. Even informal agreements can impact buyers adversely in RERA hearings, according to Gupta.

5. **Delay in Filing Complaints**: Delay in filing complaints could lead to case dismissal due to a lack of statutory limitation periods, emphasizing the necessity of timely action.

6. **Pre-EMI and Rental Return Schemes**: Participants in pre-EMI or rental return schemes may find limited support from RERA, as these arrangements typically fall outside its regulatory scope.

By being aware of these pitfalls and taking the necessary precautions, homebuyers can navigate the real estate market more effectively and ensure their rights are protected.

Frequently Asked Questions

What is RERA and how does it protect homebuyers?

RERA, or the Real Estate (Regulation and Development) Act, is a regulatory framework that provides significant protection for property purchasers' rights. It aims to address issues such as project delays and developer malpractices by establishing a strong framework to resolve grievances and direct developers to compensate for delays or mismanagement.

What are the limitations of RERA's protection?

RERA's protections primarily apply to projects underway or commenced after its enforcement. Pre-RERA projects have limited options for redress, and properties under 500 square metres or containing fewer than 8 units may not fall under RERA's jurisdiction, pushing buyers to seek redress in consumer or civil courts.

Why should homebuyers avoid one-sided agreements with developers?

One-sided agreements often favor developers and can preclude future claims if not carefully reviewed. Homebuyers should be wary of such clauses to ensure their legal rights are protected.

What are the risks of cash transactions in property purchases?

Cash transactions, often used to sidestep stamp duty, can compromise the buyer's legal position if refunds become necessary. Such transactions can undermine a buyer's standing under RERA, making it difficult to seek compensation.

Why is timely action important for filing complaints under RERA?

Delay in filing complaints can lead to case dismissal due to a lack of statutory limitation periods. Timely action is crucial to ensure that grievances are addressed promptly and effectively.