RERA and Project Restructuring: What Happens When Developers Change the Plan Midway?
Introduction : Indian Real Estate emerging as a key pillar to the economy of the nation has been resistant to the prevailing economic uncertainty. This is because of the intangibility, wealth creation, lower fluctuations, future stability, leverage opportunities, portfolio diversification and other features that are attached to it. According to people there is an inherent aspect of stability and protection that comes in combo with such investments. But this stability is not inherent, rather it is strengthened by frameworks established by RERA.
Still this area of investment is not always immune to uncertainties, like recessions, increase in interest rates, policy changes, among others but such reasons are not much in the hands of buyers. So, what is it ? It is by curbing the mid-project restructuring that takes place without the consent of buyers by the developers upon whom they place their confidence in. It is a very common practice by the builders now, to deviate from the originally sanctioned plan thus making modifications such as change in layout plans, amenities, carpet area, completion timelines etc. This uncertainty through prompt action and correct framework is looked upon by the authorities such as RERA which have consumer protection legislations in place to lower such instances, acting as a gatekeeper in the market. This ultimately gives rise to a quest between commercial decisions and buyer rights.
What is Mid-Project Restructuring and Why do Builders take such decisions?
Buying or investing in real-estate is one of the most well thought decisions a person makes. There are many considerations that come in sight before booking any home or property. But any changes that take place after such booking leaves the buyers baffled as to what can be done. The answer lies in the Real Estate (Regulation and Development) Act, 2016, known as RERA Laws. These laws have strengthened the rights of homebuyers to ensure accountability, fairness and transparency. But what is mid-project restructuring that often results in denial of rights to the buyers and why do developers take such measures? Under RERA, a project plan refers to an approved design of the building, including its floor plan, layout, common areas, amenities and other specifics that a builder gives during registration with respective state RERA authorities.
Such approved specifications are then made available to prospective buyers forming a base for the agreement between them. Thus, developers face restriction over any arbitrary or abrupt changes that they make once a buyer makes a decision based on these approved plans as the act makes it mandatory for them to stick with such plan and only allows deviation in special circumstances.
Under normal circumstances builders cannot make changes to sanctioned plans but this doesn’t mean that they can never make changes. There are certain circumstances which makes a builder eligible to make such changes such as by obtaining prior consent of the buyers for any addition or alterations, which may not be taken for minor alterations happening due to structural or architectural reasons but these minor alterations must be duly authorised along with recommendation by an architect or engineer along with giving due information to the buyers about it. But any structural changes like addition of an area, removal of a part of building, changes in floor plans or carpet area, removal of any portion of the building, removal of any promised amenities etc. does not come under minor alterations. For such changes builders require 2/3rd consent of affected buyers not including the builder itself.
For such purposes, a person having more than one asset in the project is considered as overall one entity only. The Maharashtra Real Estate Regulatory Authority (MahaRERA) in case of Deepesh S Singh and ors vs. M/s. Neelkanth Constructions, 2020 held that, taking the prior approval of the home buyer is an imperative condition. Such stance was also seen in the case of Supertech Ltd vs. Emerald Court Owner Resident Welfare Association in the year 2021 by the Hon’ble Supreme Court wherein the court ordered demolition of the Twin-Towers built by M/S Supertech Ltd. As there was a revision in building plans without taking consent of buyers who had already booked the flats based on original layouts.
Developers make such changes citing how these projects are a long-term process and require several years to come to its final form, during which there are changes at many levels in the overall landscape such as regulatory requirements, economic status, market dynamics leaving developers compelled to make such changes but theses can be termed as unforeseen circumstances and RERA does not curb such changes. But even after having legislations in place to allow only genuine alteration and deviations, developers restructure the projects without following the due process and without any such special reason, hampering the rights of homebuyers like right to receive correct information, quality construction, timely possession, receive compensation for violations, seek refunds when applicable along with many such rights that have been provided to them to ensure that no fraud takes place and to increase their confidence in such investments.
Legal Paths to Govern Mid - project Restructuring
Introduction of Real Estate (Regulation and Development) Act (RERA) in 2016 had a heterogenous effect in implementation in a lot of areas like demographic, geographic, economical, investments with many more of them being on the receiving end. It brings in statute at a holistic level when it comes to Real Estate in India. RERA’s Regulatory framework was meant to have an effect on this market by enhancing transparency, extent of changes allowed and having a check over abrupt deviations and delays of the projects thus significantly bolstering buyers’ confidence by ensuring sector’s integrity. Some of its provisions and requirements are mentioned here in: -
Mandatory Buyers’ Consent : RERA under Section 14 places responsibility on developers of a proposed project to adhere with the sanctioned plans and project specifications, highlighting its emphasis over the fact that deviations from original sanctioned plans cannot be abrupt. In line of this the provision has set conditions when it comes to requirement of consent and establishes that any addition or alterations in the plans and specifications in any aspect taken without consent can not be done unless the changes are very minor, not including certain structural changes, or deemed to be necessary by an authorised architect or engineer after giving full information to the one allotted. It also specifies the minimum requirement of consent of at least 2/3rd of buyers before making such amendments. The provision also places a duty with respect to rectification of defects without any extra charge, if found by the buyer within five years of getting possession of the property, failure of which would grant the buyer a right to get compensation.
Based for Transparency through Registration and Disclosures : Section 4 of the RERA Act talks about the process of registering projects before it is out for advertisement or sale. It mandates the developer to disclose certain information before registration of the said property which includes information related to layout plans, sanctioned plans, deadlines, approvals, specifications related to amenities provided including other information which must be known by prospective buyers and authorities before investing in the project. This acts as a foundation for the idea of ensuring accountability and transparency in this sector and retaining the confidence of the buyers.
For this Section 11 of the act places a continuing obligation or duty upon the promoter to act within the boundaries and mandates of statute and necessary parties and authorities updated with important information. This is done keeping in mind the fact that for buyers to make informed decisions and have full faith on the promoter, these disclosures become necessary and any departure from it becomes a legal issue rather than a commercial decision.
When Do the Mid-Project Changes Become Legally Risky
The question that arises now is, whether by putting forward such provisions through the RERA Act has stopped developers from exceeding these statutory limits and ensuring fairness? The answer is no; there are still many instances where due to lack of adherence to such statutory requirements resulting from personal greed or for personal benefits of the developers resulting in losses to the buyers along with hardships in finding solutions in these situations.
Such legal risks are a result of many actions that developers take which are not in favour of buyers. One of the major reasons being the unilateral alterations that are made to the sanctioned plans. This means lack of consent of buyers before making such changes. This leads to significant disruption of buyers confidence and laws that are enacted to prevent the very same thing. These unilateral changes can be in any form including reduction of carpet area or amenities to addition of new towers. Such acts become a clear violation of Section 14 of the RERA Act.
Apart from these other acts done by developers that aggravate the need for more stringent laws and swift actions from the authorities include failure in disclosure of vital information, not updating data related to changes made on RERA Portal, continuation of marketing of the new flats or property using old brochures thus misleading the buyers etc. Most common issues that are faced by an Indian home buyer is the repeated extension of timelines and delivery dates without any proper justifications. This leaves them stranded with no options left, facing problems such as money remaining stuck with the developer, lack of time and resources to question it through legal means and lack of access to mechanisms for getting compensation, interest or refund. Misrepresentation and false advertising has also played a significant role in adding to the distress of the buyers in the country as they often come face to face with absence of promised amenities without any prior information.
Rights and Duties in a Builder-Buyer Relationship
Even after the prevalence of such fraudulent acts on behalf of the developers, despite there being provisions available under statute. There is not always a loss of hope for the affected buyers. RERA Act has in place mechanisms for redressal when it comes to such instances and it places rights with the said buyers to seek justice. RERA gives buyers the opportunity to seek refund, compensations and interests if the developer fails to comply with its obligations. It also grants the buyers the right to appeal before the tribunals and courts along with the right to file a complaint before RERA Authority asking for specific performance or handing over possession on specified date along with other remedies.
A buyer can ask for information related to the project and if denied by the developer, he/she can reach the court or tribunal asking them to issue an order for disclosure of information, this also includes the right to inspect documents and know the status of projects. The presence of such legal remedies not only builds confidence in the status of buyers but it also ensures that they are not left stranded without any possible way out due to personal interests of a few. Ensuring increase in real-estate investments affecting the overall economy of the nations. Thus, the presence of such mechanisms achieves its end goal when the authorities work on them and ensures swift actions with accessibility keeping the welfare of the buyers in mind.
As seen in the recent case of, Anish Charudatta Galgate & Anr. v. Rejoice Homes LLP & Ors., it was ruled that a promoter cannot justify delay in handing possession of flat citing the reason to be routine business and regulatory issues and thus ordering the promoter to pay interest at SBI MCLR plus 2% on the actual amount paid towards the flat consideration. It also held that promoter’s obligation under RERA also include obtaining statutory approvals in time and regulatory issues and routine business can’t be force majeure. Thus, evidencing the stance and approach that current courts have towards matters when it comes to buyers’ rights and seriousness in approach towards the Real-Estate sector.
Conclusion
One thing that we understand is that project restructuring has been an inevitable aspect of modern real estate development due to various factors that influence it like financial constraints, market demands, redevelopment etc. Here, RERA comes into picture to ensure that such change is neither arbitrary nor opaque. It emphasises on the principles such as transparency, accountability and disclosure of correct and every information needed by a buyer to make informed decisions and stepping into traps. The reinforcement of commercial flexibility is done by the Act keeping in mind that it cannot come at the expense of consumer confidence. The sector of real-estate has forever been evolving and will continue to do so, what becomes the most essential is adherence to the principles so as to foster sustainable development and maintaining long standing trust between the developers or promoters and homebuyers both ways.
Author: Ananya Singh, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.
Endnotes / References
Abinaya S, Vilasinisuman and Taskeen ZF, 'Real Estate Sector in India & Impact of RERA' (2021) 7(7) International Journal of Scientific Advanced Research and Technology 122.
Deepesh S Singh and Others v M/s Neelkanth Constructions, Complaint No. CC006000000184704 (MahaRERA, 30 July 2020).
Supertech Ltd v Emerald Court Owner Resident Welfare Association (2021) 10 SCC 1.
Real Estate (Regulation and Development) Act 2016, s 14.
Real Estate (Regulation and Development) Act 2016, s 4.
Real Estate (Regulation and Development) Act 2016, s 11.
Anish Charudatta Galgate and Another v Rejoice Homes LLP and Others, Complaint No CC12504437 (MahaRERA, 6 July 2026), 2026 LLBiz RERA (MH) 116.
Pravin Minde & Mahesh Patil. A comprehensive review of the Real Estate Act, 2016: Challenges and opportunities. A comprehensive review of the Real Estate Act, 2016: Challenges and opportunities.
A Bhandari, 'Compensation for Delayed Possession: RERA vs CPA' (The ICLRAP Blog, 2020) http://iclrap.in/compensation-for-delayed-possession-rera-v-cpa/ accessed 18 July 2026.
S Bhadauria, 'What Should You Do If the Builder Delays the Project Incessantly?' (99acres, 2023) https://www.99acres.com/articles/what-should-you-do-if-the-builder-delays-the-project-incessantly.html accessed 18 July 2026.
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