Builder charging hidden costs? Legal remedies under RERA for Chandigarh buyers are increasingly relevant as property transactions become more complex and buyers face unexpected financial burdens. Hidden charges—such as escalation in development fees, club membership costs, preferential location charges (PLC), and maintenance deposits—often surface after the agreement is signed, leaving buyers with limited recourse. This article provides a comprehensive legal framework for addressing such issues under the Real Estate (Regulation and Development) Act, 2016 (RERA), the Consumer Protection Act, 2019, and relevant judicial precedents. It is designed to guide law students, property buyers, and legal professionals including RERA lawyers, civil property advocates, and high court lawyers in Chandigarh.
Legal Framework Governing Hidden Charges in Real Estate Transactions
Real Estate (Regulation and Development) Act, 2016
RERA was enacted to promote transparency and accountability in the real estate sector. It mandates full disclosure of project costs and prohibits arbitrary imposition of charges not agreed upon in writing.
Section 4(2)(l)(C): Disclosure of Project Cost
Promoters must disclose the estimated cost of the real estate project, including land cost, construction cost, and other charges. Any deviation from this disclosure is a violation of RERA.
Section 11(4)(a): Adherence to Agreement
The promoter is obligated to execute a registered agreement for sale and adhere strictly to the terms. Imposing hidden costs not mentioned in the agreement constitutes a breach.
Section 12: False Advertisement
If a buyer is misled by advertisements or brochures that omit hidden charges, they may claim compensation under this section.
Section 18(1): Refund and Compensation
Buyers may seek refund and compensation if hidden charges result in financial loss or breach of contractual terms.
Section 31: Filing of Complaints
Any aggrieved buyer may file a complaint with the RERA Authority or Adjudicating Officer for violations related to hidden costs.
Section 40: Enforcement of Orders
If the builder fails to comply with RERA orders, the amount due shall be recovered as arrears of land revenue.
Consumer Protection Act, 2019
Section 2(1)(g): Deficiency in Service
Charging hidden costs without prior disclosure constitutes deficiency in service.
Section 2(1)(r): Unfair Trade Practice
Builders who misrepresent pricing or conceal charges engage in unfair trade practices.
Section 100: Overriding Effect
Consumer law prevails in case of inconsistency with other laws, including RERA.
Indian Contract Act, 1872
Section 73: Compensation for Breach
Buyers may claim damages for breach of contract arising from undisclosed charges.
Section 74: Penalty Clauses
If the agreement includes penalty clauses for non-disclosure, they may be enforced through civil proceedings.
Common Hidden Charges Faced by Buyers in Chandigarh
Preferential Location Charges (PLC)
Builders often impose PLC for units facing parks, roads, or higher floors without prior disclosure.
Club Membership and Amenities Fees
Charges for club membership, gym access, or recreational facilities are added post-booking.
Escalation in Development Charges
Additional development fees are levied citing regulatory changes, often without buyer consent.
Maintenance and Security Deposits
Buyers are asked to pay lump-sum maintenance or security charges before possession, which may not be part of the original agreement.
Remedies Available to Buyers in Chandigarh
Filing a Complaint Before RERA Authority
Buyers may file complaints under Section 31 for imposition of hidden charges.
Required Documents
- Builder-buyer agreement
- Payment receipts
- Project brochure and advertisements
- Correspondence with builder
- Legal notice (if issued)
Filing Portals
- Punjab RERA: rera.punjab.gov.in
- Haryana RERA: haryanarera.gov.in
Seeking Compensation and Refund
Under Section 18, buyers may claim refund of excess charges, interest, and compensation for mental agony.
Execution of RERA Orders
If the builder fails to comply with RERA orders, buyers may file an execution petition under Section 40. The Authority will issue a recovery certificate to the District Collector.
Filing a Complaint Under Consumer Protection Act
Buyers may file complaints before the District Consumer Disputes Redressal Commission for deficiency in service and unfair trade practices.
Filing a Writ Petition Before High Court
If RERA delays enforcement, buyers may approach the Punjab and Haryana High Court under Article 226 for a writ of mandamus. High court advocates in Chandigarh assist in drafting and filing such petitions.
Judicial Precedents on Hidden Charges
Pioneer Urban Land and Infrastructure Ltd. v. Govindan Raghavan (2019)
Supreme Court held that builders cannot impose charges not agreed upon in the sale agreement.
Sanjay Sharma v. Omaxe Chandigarh Extension Developers Pvt. Ltd.
Punjab RERA directed refund of excess charges and awarded compensation for mental agony.
Ajay Kumar v. RERA Haryana
Builder was penalized for imposing undisclosed PLC and directed to revise the demand.
Practical Steps for Buyers in Chandigarh
Step-by-Step Guide
Step 1: Review Agreement
Verify if the charges are mentioned in the registered agreement for sale.
Step 2: Send Legal Notice
Issue a formal notice to the builder demanding withdrawal of hidden charges.
Step 3: File RERA Complaint
Include agreement, payment records, and builder correspondence.
Step 4: Attend Hearings
Present evidence and request refund or compensation.
Step 5: Escalate if Needed
Approach High Court or Consumer Forum if builder remains non-compliant.
Tips for Buyers
- Never pay charges not mentioned in the agreement
- Consult RERA advocates or civil property lawyers in Chandigarh
- Preserve all documents and correspondence
- Use RTI to verify project approvals and cost disclosures
- Avoid verbal assurances—insist on written terms
Builder charging hidden costs? Legal remedies under RERA for Chandigarh buyers are robust and enforceable. Whether it’s PLC, club fees, or maintenance deposits, buyers have the right to challenge undisclosed charges and seek compensation. The Real Estate (Regulation and Development) Act, 2016, along with consumer and contract law, provides a comprehensive framework for redressal. Whether you are a law student studying real estate regulation or a buyer facing builder misconduct, consulting qualified RERA lawyers, civil property advocates, and high court lawyers in Chandigarh ensures that your rights are protected and enforced effectively.
FAQs on Builder Charging Hidden Costs in Chandigarh
- Can a builder legally impose hidden charges after signing the agreement? No. Under the Real Estate (Regulation and Development) Act, 2016 and Indian contract law, all charges must be transparently disclosed in the registered builder-buyer agreement. Imposing costs like club fees or preferential location charges post-signing is unlawful. Experienced RERA lawyers in Chandigarh assist buyers in challenging such demands through formal complaints and legal notices.
- What are the common hidden charges buyers should watch for? Common hidden costs include preferential location charges (PLC), club membership fees, inflated development charges, and advance maintenance deposits. These are often not mentioned in the agreement but added later. Civil property advocates in Chandigarh help buyers identify, document, and contest these charges before RERA or consumer forums.
- How can I recover money paid towards hidden charges? Buyers can file a complaint under RERA or the Consumer Protection Act, 2019 to seek refund and compensation. Property lawyers in Chandigarh assist in preparing refund claims, quantifying financial loss, and representing clients before the RERA Authority or District Consumer Disputes Redressal Commission.
- Is it mandatory to send a legal notice before filing a RERA complaint? While not legally mandatory, sending a formal legal notice to the builder strengthens the buyer’s position and demonstrates intent to pursue legal remedies. RERA advocates in Chandigarh recommend issuing a notice before initiating proceedings, especially in cases involving hidden charges or breach of agreement.
- What if RERA does not enforce the order? If the builder fails to comply with a RERA order and the Authority delays enforcement, buyers may approach the Punjab and Haryana High Court under Article 226 of the Constitution for a writ of mandamus. High court lawyers in Chandigarh assist with drafting writ petitions, seeking judicial directions, and initiating contempt proceedings if necessary.