Late Handovers Explained: Causes of Project Delay and a Pre-Booking Risk Routine

Few things sour a home purchase in Bangalore like a possession date that keeps sliding. The reasons behind such slips are surprisingly repetitive, which means a buyer can test for them before parting with a booking amount. What follows starts with the rights the law gives, moves to the typical causes and ends with a routine for sizing up any project.

What the Law Gives a Buyer

The RERA Act of 2016 asks every promoter to file a sworn declaration at registration. Four promises in it matter for timing:

• The land title is legal, and any encumbrance has been disclosed
• A completion period has been fixed for the project or phase
• Seventy per cent of buyers' payments will be parked in its own bank account, usable only for land and construction
• Pending approvals will be obtained on time

Cash leaves that account only in proportion to the work finished. A project engineer, a project architect and a chartered accountant all sign off on each withdrawal, and an audit comes within half a year of every financial year end. Because of this rule, shifting buyers' money into another venture is much harder than it once was.

Extensions are tightly worded. Under Section 6, force majeure means war or a natural calamity such as flood, drought, fire, cyclone or earthquake. If a delay is reasonable and not the promoter's fault, the Authority may add time, to a maximum of one year overall.

If Possession Slips Past the Agreed Date

Section 18 sets out two options if the home is not ready by the agreed date. The buyer can walk away and recover the payments with interest and compensation. Alternatively, the buyer can stay on and collect interest for each month until handover.

Either claim goes to the state's regulatory authority. A longer registration period does not, on its own, change the date printed in the buyer's contract. Whether the promised date really changed depends on that contract and the force majeure terms.

Where Delay Comes From

Six sources explain nearly every late project. Think of them as a list of questions to ask about the builder and the plot:

1. Is the title clean? A claim from an earlier owner, a relative or a neighbour can bring a stay order, and joint development deals can stall when landowner and developer disagree.
2. Are permissions complete? Plan sanction, a commencement certificate and no-objections covering fire, water, power and the environment come from different offices, each with its own waiting time.
3. Is the money there? Developer capital, bank finance and buyer instalments fund the work, and a sales slump hits the third source and slows the site.
4. Has money been shifted? Funds raised for one project have at times been spent on plots elsewhere or on another tower, leaving the first one short.
5. Are workers, materials and access reliable? Skilled labour gaps, steel or cement price jumps, contractor fights, and weak road, water or power connections each cost months.
6. Could nature intervene? Even well-run sites halt when floods, quakes, blazes or war strike, though the Act treats them apart.

The Real Cost of Waiting

Someone buying an unfinished flat typically covers rent and interest on the loan at once, so each extra month of construction doubles up. At booking this feels remote, as the brochure date seems fixed and the price undercuts finished homes.

A slip also delays the OC, registration of the sale deed, the e-khata and fit-out work. Families who timed school admissions or a relocation to possession carry that burden as well. Estimating delay risk is therefore part of deciding if a price is fair.

An Evening of Checks on the Portal

The state's RERA website answers most questions at no cost. Work through these seven in sequence:

1. Dates. Place the completion date declared online next to the handover date quoted by sales staff, since only the declared one carries legal force.
2. Extensions. If registration has been lengthened, the first plan has already failed.
3. History. The filing names the previous five years' projects, with status, delay and pending cases.
4. Quarterly entries. Bookings, approvals and status should be refreshed within 15 days of each quarter's end.
5. Approvals. Look for uploaded sanction and commencement papers, and a short list of those still pending.
6. Land. A lawyer's view on title, plus an encumbrance certificate, reveals any dispute or mortgage.
7. Site. Tally workers and cranes, then set the floors actually built against the percentage reported.

A bank's sanction helps a little, since the bank has examined the title and the plan. It reveals almost nothing about how quickly the floors will go up.

Red Flags After Booking

Stay alert after the booking. Concern is justified when several of these show up together:

• Progress updates that arrive late or stop
• Thin staffing across repeated site visits
• Demands for money that outrun the stage of work
• Steep discounts and odd payment schemes on unsold flats

Section 19(2) entitles buyers to the stage-wise completion schedule, with details on water, power and other utilities. Asking in writing for the latest schedule is a fair first move. Fellow buyers usually learn more by pooling observations than by asking one at a time.

Setting Up the Purchase Safely

Under a plan linked to construction stages, each instalment follows a finished stage, so cash follows the building upward. Handing over most of the price early forfeits that cover. Until a registered sale agreement is in place, the Act caps the advance at booking at a tenth of the price.

The agreement fixes the handover date, any grace period and the force majeure wording, so give all three a slow reading. A household that can fund half a year to a year of extra rent can absorb a moderate slip. Use the EMI calculator to see what the loan would cost each month over that time.