Uttar Pradesh RERA warns builders not to hand over incomplete flats to buyers, ET RealEstate

May 12, 2025 Clicktoprints

NOIDA: UP Rera has warned developers not to hand over incomplete, or ‘canvas flats’, to homebuyers, and violating this rule could attract large sums of penalties.

The notice, issued on May 8, came in response to complaints from homebuyers, who allege that developers are forcing them to take possession of bare-shell units – which are often devoid of proper flooring, electrical fittings, plumbing and kitchen furnishings – while signing the builder-buyer agreements (BBA).

Rera said in the notice that such practices were a serious breach of the Real Estate (Regulation and Development) Act, 2016, which mandates that ready-to-move-in apartments can be handed to buyers after obtaining valid occupancy or completion certificates.

“It has come to the notice of the regulatory authority that some of the promoters, when executing the agreement for sale (BBA), are making the allottees agree to the condition of accepting physical possession of canvas flats and are, in fact, handing over possession to such flats,” the notice by Rera secretary Mahendra Verma said.

It added that promoters can only give physical possession of the apartments after receiving OCs/CCs and executing sales deeds/lease deeds/sub-lease deeds.

According to the complaints, developers are using this technique to offload unsold and unfinished inventory, exposing homebuyers to potential delays, additional costs and legal complications. Penalties for these violations could go up to 5% of the real estate project’s total cost, the notice read.

Developers said on Saturday that Rera’s notice would help make the industry more disciplined.

“As per UP Rera’s earlier directives, if a developer applies for four key NOCs — fire safety, structural stability, lifts and electricity — and does not receive a response from the competent authority within a month, it should be treated as a case of deemed occupancy or completion certificate (OC/CC). In such cases, developers should be allowed to offer possession. We fully agree that possession should not be offered merely to raise the final demand for payment. It must reflect a genuine intent to hand over a livable home to the buyer. Where deemed OC is applicable and all essential services and common amenities are in place, buyers should be allowed to take possession. This approach will protect homebuyers from undue harassment and the long wait for elusive OC/CC approvals,” said Dinesh Gupta, secretary of CREDAI’s western UP unit, said.

Umesh Rathore, vice-president for sales and marketing for VVIP Group said, “UP Rera’s latest directive is both timely and welcome. It will significantly boost homebuyer confidence and strengthen the credibility of the real estate sector. The Authority is setting a strong precedent. This move pushes the industry toward much-needed discipline and ensures better protection for genuine homebuyers.”

Separately, all three development authorities in the district – Noida, Greater Noida and Yamuna Expressway – have now made it mandatory to sign a bipartite agreement with the developer and pay stamp duty at the time of booking to prevent multiple sales of the same unit.