TN RERA Calls Labour, Material Shortages ‘Lame Excuses’; Pulls Up Developer for Delay

Chennai, March 30: In a strong ruling that reinforces homebuyer rights, the Tamil Nadu Real Estate Regulatory Authority (TN RERA) has dismissed common excuses cited by developers for project delays, calling them "lame excuses." The authority ordered a builder to provide a buyer with a comparable unit in the same project at the original terms after the developer canceled the allotment and resold the flat at a higher price.

The Case

The case involved a buyer who booked a 2.5 BHK flat on the 19th floor of a project in Jalladianpettai, Sholinganallur, Chennai. Key details:

Saleable area: 1,489 sq ft
Total cost: ₹62.59 lakh
Car parking: One space
Advance paid: ₹50,000 (March 20, 2021)
Further payment: ₹9,12,896 (March 24, 2021)
Undivided land share: 298 sq ft for ₹7.82 lakh
Promised possession: On or before June 30, 2021

What Went Wrong

The buyer later discovered through an encumbrance certificate that the same flat had been sold to another buyer on October 24, 2024, for ₹1.11 crore—almost double the original price. The buyer had fulfilled his payment commitments and was not responsible for any delay.

The cancellation put the buyer under significant financial pressure, as he was simultaneously paying rent and servicing a home loan.

Developer's Defense

The developer attributed the delay to external factors, including:

Natural calamities
Labour shortages
Lack of construction materials
Delays in securing statutory approvals

The developer also claimed that the buyer had defaulted on subsequent payments despite repeated reminders.

TN RERA's Strong Observations

Rejecting the developer's arguments, the authority held that such reasons cannot constitute valid grounds for project delays under the regulatory framework.

"The Respondent has submitted that delay in construction occurred due to natural calamities, labour and material shortage, delay in statutory approvals etc. All these reasons are very generic in nature and cannot be held as valid reasons for delay," the authority said.

The order further stated: "It is the responsibility of the Respondent to arrange labour and construction material and obtain statutory approvals. It is beyond the apprehension of this Authority what kind of statutory approvals the Respondent is talking about when the project has already been registered with TN RERA. All these approvals are obtained before launching the project."

"The Authority is of the opinion that the reasons cited for delay by the Respondent are lame excuses and not convincing. Thus, the Respondent is held responsible for the delay in handing over the possession of the apartment to the Complainant in spite of the Complainant paying the amount as required by the agreement."

The Authority's Order

TN RERA directed the builder to:

Provide the buyer with a comparable unit within the same project
Match the original specifications and pricing agreed at the time of booking
Hand over possession with the same terms and conditions

"This authority is of the view that the Respondent shall handover the possession of an apartment with similar specifications similar to the originally booked apartment in the same project to the Complainant at the terms and conditions agreed between the parties," the order stated.

Significance of the Ruling

This ruling sends a strong message to developers across Tamil Nadu:

Labour and material shortages are not valid excuses for delays
Approval delays cannot be cited after project registration with RERA
Developers are expected to factor contingencies while committing delivery timelines
Canceling allotments and reselling at higher prices after delays is a breach of trust