When a builder disappears from a site, or the RERA Authority takes away the project's registration, buyers often assume their money is lost. It is not. The Real Estate (Regulation and Development) Act, 2016 (RERA) treats this as one of the clearest cases for a refund, and it also gives the Authority tools to get the building finished. This article explains both paths.
Short answer: If the promoter cannot hand over your flat because it has stopped business as a developer, including because its registration was suspended or revoked, Section 18(1) lets you withdraw and demand your money back with interest. Revocation does not wipe out that right. Section 8 separately lets the Authority arrange completion of the remaining work.
"Abandoned" is not a legal term
RERA does not use the word "abandoned". What matters is which of these situations you are in:
| Situation | What it means | Main provisions |
|---|---|---|
| Registration revoked | The Authority cancelled the project's registration after notice | Section 7, Section 8 |
| Registration lapsed | The registration period ended without completion or extension | Section 8 |
| Promoter stopped work or business | The site is idle or the developer has "discontinued business" | Section 18(1) |
| Delay only | Work continues but the agreed date is missed | Section 18(1) and its proviso |
When can registration be revoked?
Under Section 7, the Authority may revoke a project's registration on a complaint, on its own motion or on the recommendation of the competent authority. The grounds include the promoter making default in doing anything required by the Act, rules or regulations, violating the terms of an approval from the competent authority, indulging in unfair practices or irregularities, and fraud. The Authority must give the promoter at least thirty days' written notice and consider its reply. Instead of revoking, it may allow the registration to continue on added conditions to protect allottees.
On revocation, the Authority must, among other things, list the promoter as a defaulter on its website, inform other State Authorities, and direct the project's bank to freeze the project account, later allowing it to be used for the remaining works. Our article on checking whether a project is RERA registered shows how to see a project's status on the portal.
Your refund right survives revocation
Section 18(1)(b) covers a promoter that cannot give possession "due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason". In that case, if you wish to withdraw, the promoter must return the amount received for your flat on demand, with interest at the prescribed rate, including compensation as provided under the Act. This is without prejudice to any other remedy you have.
The Supreme Court, in Newtech Promoters and Developers Pvt. Ltd. v. State of U.P. (decided 11 November 2021), described the refund right under Sections 18(1)(a) and 19(4) as unconditional. It also noted that, under Section 8, the Authority is under an obligation, among other things, to carry out the remaining development work where registration lapses or is revoked. The two routes sit side by side: you are not forced to wait for completion.
What Section 8 lets the Authority do
When registration lapses or is revoked, Section 8 allows the Authority to consult the appropriate Government and take the action it considers fit. The remaining development work can be carried out by a competent authority, by the association of allottees, or in any other manner the Authority decides. Two safeguards are built in:
- A direction under Section 8 does not take effect until the time for appeal has expired.
- On revocation, the association of allottees has the first right of refusal to carry out the remaining work.
So buyers face a real choice, and it is often a collective one.
| Option A: Take a refund | Option B: Back completion | |
|---|---|---|
| What you get | Principal plus interest, and compensation where proved | The flat, if the project is finished |
| Who acts | You, through a complaint | Usually the allottees as a group, with the Authority |
| Speed | Depends on the order and recovery | Depends on funds, approvals and the group |
| Main risk | The promoter may have no assets, and recovery can be slow | Money may run short; costs may be shared |
| Suits you if | You want out, or lost trust | You still want the home and most buyers agree |
Steps for an individual buyer
- Confirm the status. Check the project page on your State RERA portal for revocation, lapse or any order of the Authority.
- Collect proof of payment. Agreement for Sale, receipts, bank statements, demand letters. If you hold a bank loan, add the loan documents.
- Send a written demand. Section 18(1) makes the refund payable "on demand". State that you are withdrawing and the amount claimed.
- File a complaint for refund and interest on the State portal. Our guide to filing a RERA complaint online walks through UP-RERA.
- Ask for compensation separately where you have losses to prove. The Supreme Court held in Newtech that refund and interest are decided by the Authority and compensation by the Adjudicating Officer.
- Enforce the order. If the promoter does not pay, the refund can be recovered as arrears of land revenue. See our article on recovery as arrears of land revenue.
Points for lawyers
- Group strategy. Section 8 gives the association of allottees a first right of refusal on revocation. Where many buyers wish to continue, a registered association can engage with the Authority. Individuals who prefer a refund can still proceed under Section 18.
- Where the money is. Look at the project account and any bank account freeze under Section 7, other creditors, and whether the promoter has other projects. A refund order is only as good as the assets available.
- Insolvency. If the promoter is in insolvency proceedings, a moratorium may affect recovery. Check the status before choosing a forum.
- Appeals. A promoter that appeals a refund order to the Appellate Tribunal must first deposit the total amount payable to the allottee, including interest and compensation, under the proviso to Section 43(5). The Supreme Court upheld that condition in Newtech.
Common mistakes
- Waiting for the Authority's Section 8 plan before claiming. The refund right is separate.
- Signing a "full and final settlement" with a new developer without reading it.
- Ignoring the loan. A refund may need to be shared with your bank; see our article on loan interest and refunds.
- Missing the appeal window against a Section 8 direction if you are affected by it.
Frequently asked questions
Is a refund available if registration was never revoked but work has stopped? Section 18(1) also applies where the promoter fails to complete or give possession by the agreed date. Our article on delayed possession options explains this.
Can I get my money back and also keep the flat? No. A refund means you withdraw from the project.
Does revocation cancel my agreement? Not automatically. Your rights depend on your agreement and on Section 18. Take advice before accepting any new terms.
Will I get the money quickly? Not necessarily. See our article on how long a RERA refund takes.
This article is for general information and is not legal advice. Laws, rules and rates differ by state and change over time. Verify before acting.