Indian Real Estate

How can a buyer exit a project under RERA


10, January 2026

The Real Estate Regulation and Development Act of 2016 (RERA) has significantly strengthened the rights of homebuyers' in India. One of the essential requirements is the buyer's freedom to exit a project under specified conditions. However, understanding the process and its implications is critical.

Today, in this blog, let us understand the important considerations and steps involved to exit a project under RERA.

Reasons for exiting a project under RERA

1. Developer's Default

  • Common Incident: Developers often fail on project timelines or RERA provisions.
  • Initial Action: The allottee should send a formal letter to the developer explaining the default or breach and providing time for correction.
  • Agreement effects: If the developer fails to resolve the issue, the sale agreement normally outlines its effects, including the possibility of termination.
  • Refund and Interest: In the case of termination due to delays or breaches, the allottee is usually entitled to a refund with interest, which is calculated at SBI's highest marginal cost of lending rate 2%.
  • Legal Recourse: If the developer fails to refund the amount after termination, the allottee can file a complaint with the RERA authority.

2. Personal Reasons

  • Valid Personal Circumstances: Buyers may need to exit due to personal emergencies, such as a family death, loss of income, or other investments.
  • Sale Agreement Conditions: The sale agreement usually has provisions allowing the buyer to cancel or withdraw from the transaction for personal reasons.
  • Forfeiture of Booking Amount: If the buyer cancels without the developer's fault, the promoter may forfeit the booking amount, with the remaining balance refunded within 60 days.
  • Review Agreement Terms: When considering a personal exit, reviewing and understanding any cancellation conditions in the sale agreement is critical.

Consider reading: The ultimate guide to MahaRERA Registration and Project Search

GRC Shreekrish - Homes247.in

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Procedures for exiting a project under RERA

  • Allotment Cancellation by the Developer: If a developer cancels an allotment unfairly and fails to follow the conditions of the sale agreement, the buyer has the right to challenge the decision and seek justice through the Real Estate Regulatory Authority (RERA).

  • Booking Cancellation by the Buyer: Buyers can cancel a booking following the conditions of the sale agreement, with the possibility of forfeiting the booking amount. If the agreement is unregistered and any payment has been made, the buyer is usually entitled to a full refund, and any refusal by the developer can be contested under RERA.

  • Step-by-Step Exit Method: The buyer should follow a clear process, notify the developer of their intention to exit, negotiate a refund, and if the issue remains unresolved, apply the case to RERA for a fair conclusion.

Key Considerations

  1. Refund Amount: The amount you receive depends on the construction stage, agreement terms, and the reasons for exiting the project.
  2. Interest Payment: Developers often have to pay interest on your payment, especially if there is a delay in possession.
  3. Legal Advice: Consult a legal expert to learn more about your RERA rights and ensure a smooth exit.

Common Mistakes Buyers Make When Exiting a Project Under RERA

  • Failing to Serve a Formal Notice: Failing to serve a formal written notice to the developer may limit your right to exit.

  • Not Documenting all Communications: Without complete documentation of all interactions, proving the developer's mistake becomes challenging.

  • Delaying Legal Action: Delaying a RERA complaint may result in missed deadlines and lost rights.

  • Misunderstanding the Refund Terms: Failure to fully understand the refund terms might result in disputes over the amount, timeline, and interest.

  • Overlooking Additional Costs: Failure to account for additional expenses such as legal fees and transfer fees could complicate the exit process

  • Neglecting to consult a legal expert: Without legal advice, you can risk making poor decisions and losing your rights.

  • Expecting RERA to resolve the issue automatically: RERA's resolution process can be lengthy and includes many hearings.

  • Failing to Consider Alternative Options: Overlooking options such as renegotiation or partial refunds may result in an unjustified termination.

Conclusion

Exiting a project under RERA requires careful consideration and adherence to specific procedures.

Issue a formal notice, document all communications, clarify refund terms, and seek legal assistance as quickly as possible. It is critical to avoid mistakes such as delaying action, overlooking additional costs, or expecting that RERA will automatically resolve issues.

By staying informed and proactive, buyers may efficiently negotiate the exit process and maintain their rights. Carefully review the sale agreement and consult with experts to ensure an easy and fair exit, ultimately safeguarding your interests and reaching an acceptable resolution.

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