If you paid the booking amount and about ten percent of the price, the builder never signed an agreement for sale, and the flat has now been sold to someone else, you can claim the money you actually paid with interest from the K-RERA Authority, and compensation from its adjudicating officer, which can reflect the rise in price you can no longer buy into. On 7 October 2026 the adjudicating officer of the Karnataka Real Estate Regulatory Authority awarded Rs 5 lakh to a Bengaluru buyer whose allotted flat had been given to a third party after the builder took Rs 16,50,016 without executing an agreement for sale. Getting the same flat back is much harder.
Part of the RERA and homebuyer disputes practice at S Jain & Attorneys, Bangalore.
This guide is for a buyer who did not default: you hold receipts and usually an allotment letter, the agreement was promised and never signed, and you found out that the flat was already sold. If the builder is only threatening to give your flat away, the guide on a builder demanding 20 percent before registering the agreement covers what to write. If the builder cancelled because you missed instalments under a signed agreement, read the guide on a cancelled booking and forfeiture instead.
| What you want | Where it goes | What the law or the 2026 order says | What you must prove |
|---|---|---|---|
| Your money back with interest | The Authority, Form N under Rule 29(1), fee Rs 1,000 | Interest at the State Bank of India highest MCLR plus two percent under Rule 16 of the Karnataka Rules | Every payment, from receipts and bank statements |
| Compensation, including lost appreciation | The adjudicating officer, Form O under Rule 30(1), fee Rs 1,000 | Rs 5 lakh awarded in Complaint No. 00877/2026 against a claim of Rs 40.5 lakh | The loss, such as the builder's own higher price for a comparable flat |
| The same flat | A court, where the allotment amounts to a contract | Section 19(b) of the Specific Relief Act protects a later buyer who paid in good faith without notice | A concluded contract for that flat, against a buyer who cannot show good faith without notice |
| A penalty on the builder | The Authority, on its own or on your complaint | Section 61 allows a penalty of up to five percent of the estimated project cost | The Section 13 breach. The penalty is not paid to you |
Three facts frame every claim that follows.
The ten percent line
Section 13(1) bars a promoter from taking more than ten percent of the cost without first signing and registering a written agreement for sale with you.
No agreement, no cancellation clause
Section 11(5) lets a promoter cancel an allotment only in terms of the agreement for sale. Without an agreement there are no terms to cancel under.
Rs 5 lakh awarded
K-RERA's adjudicating officer awarded Rs 5 lakh plus Rs 7,000 costs to a buyer whose allotted flat was sold to a third party, with interest if unpaid after sixty days.
Can the builder sell my flat to someone else after taking more than 10 percent?
Not lawfully, if he took more than ten percent without an agreement and then gave the flat away without your consent. Section 13(1) of the Real Estate (Regulation and Development) Act, 2016 says a promoter "shall not accept a sum more than ten per cent" of the cost as an advance or application fee without first entering into a written agreement for sale and registering it. Section 11(5) says the promoter "may cancel the allotment only in terms of the agreement for sale", and its proviso lets the allottee approach the Authority against a cancellation that is unilateral and without sufficient cause. A builder who never signed the agreement has no clause to point to, although the Karnataka order did not rule on Section 11(5) separately.
The Karnataka order shows how this plays out. In Complaint No. 00877/2026 against Casagrand Lotus Private Limited, the buyer received an allotment letter dated 30 December 2024 for a flat priced at Rs 1,64,99,147.70, paid Rs 1,00,000 at booking and Rs 15,50,016 on 19 January 2025, and received a draft agreement by email four days later. A fresh, larger demand followed, the agreement was never executed, and on a site visit on 30 October 2025 the buyer found the flat re-allotted under an agreement for sale with a third party. A written message from the project said the original flat could not be allotted because another customer had paid 50 percent.
The adjudicating officer found from the receipts that the builder had received Rs 16,50,016 without executing an agreement, which the order calls "a clear violation of RERA Act", and found from the allotment letter, the emails and the draft agreement that the builder had executed an agreement for the same flat in favour of a third party. The builder did not appear and was placed ex parte, so the finding rests on the buyer's documents. The signed copy describes the payment as ten percent of the consideration, the words "more than" having been struck out by hand, although the arithmetic puts it about Rs 100 above the line.
A Punjab order of 14 October 2026 goes further on the Section 13 point. In Complaint GC No. 0455 of 2024, the Punjab Real Estate Regulatory Authority held that an offer letter, application, affidavit or indemnity cannot substitute the statutory agreement for sale, directed the promoter to execute the agreement, and directed its Secretary to start penalty proceedings under Section 61 read with Section 13(1). It does not bind K-RERA, but it reads the same central Act.
Key takeaway. Taking more than ten percent without a registered agreement is itself a breach of Section 13, whatever the builder later says about a revised payment plan. Selling the flat to someone else on top of it is the loss the adjudicating officer compensated in the Karnataka case.
Can I get the same flat back from the new buyer?
Rarely, and not through a refund complaint. The new buyer is not a party to your dealings with the builder, and Section 19(b) of the Specific Relief Act, 1963 lets specific performance of a contract be enforced against a person claiming under a later title "except a transferee for value who has paid his money in good faith and without notice of the original contract". So you would have to show that your allotment letter and receipts amount to a concluded contract for that flat, and the second buyer escapes only if he paid in good faith without notice of it. Those are questions for a civil court on evidence, covered in the guide on a seller who will not register after taking an advance.
The Karnataka order did not reach the question. The buyer there asked only for compensation, and the refund claim was filed separately before the Authority. Where the flat has not yet gone to anyone else, the position is different: the Punjab order directed the promoter to execute the registered agreement for the very unit. That is the time to ask for an interim restraint, which the guide on a builder demanding 20 percent explains.
A comparable flat in the same project is often the practical middle path, but nothing in the Act obliges the builder to offer one at your old price.
What can I claim: refund, interest and compensation?
You can claim back everything you actually paid, interest on it at the prescribed rate, and compensation for the loss the sale caused. Rule 16 of the Karnataka Real Estate (Regulation and Development) Rules, 2017 fixes the rate payable by a promoter to an allottee at "the State Bank of India highest marginal cost of lending rate plus two percent", and Rule 17 makes a refund with interest and compensation payable within sixty days from the date it becomes due. How the rate is applied month by month is in the guide on K-RERA interest at SBI MCLR plus two percent.
The refund sections of the Act, Section 18(1) and Section 19(4), speak of possession "in accordance with the terms of the agreement for sale", and here there is none. That is why the buyer in the Karnataka case pleaded Sections 11(5), 13 and 18(3), the last of which makes a promoter who fails to discharge "any other obligations imposed on him under this Act" liable to compensate the allottee. The refund complaint in that case was pending before the Authority when the compensation order was passed on 7 October 2026, so that order does not decide the refund.
Count only money that left your account. The claim is the booking cheque and the transfers on your bank statement, not a discount the builder showed on a cost sheet, not a credit or GST adjustment, and never the unpaid demand that started the dispute.
Does the price rise I have lost count as compensation?
It can be weighed, but the Karnataka order did not price it. The adjudicating officer wrote that where possession is eventually delivered compensation may ordinarily be lower because the allottee gets the appreciation, but "where refund alone is directed, compensation may be higher as the allottee is deprived of both possession and escalation in value." Section 71 sends compensation under Sections 12, 14, 18 and 19 to the adjudicating officer, and Section 72 lists what he weighs, including the builder's unfair advantage and the loss caused.
The figure is a judgment, not a formula. The buyer claimed Rs 15 lakh for mental agony, Rs 25 lakh for financial loss and loss of opportunity and Rs 50,000 in costs, and pleaded that the builder's own marketing quoted a similar flat in the same tower, on a lower floor, at about Rs 26 lakh more. The order did not adopt that figure. It considered the amount paid and how long the builder held it, said loss could be assessed on what the buyer could have earned had the money been in hand, and awarded Rs 5 lakh in all, with Rs 7,000 in costs. If unpaid within sixty days, interest at MCLR plus two percent a year runs from the sixty-first day.
Common mistake. Claiming appreciation on a round percentage with no paper behind it. The price evidence that carries weight is the builder's own: his website price range, a fresh quotation for a comparable unit, or the price in the new buyer's agreement if you can obtain it.
Is this cheating, and is a police complaint worth it?
It can be, but only if the builder meant to deceive you when he took the money. Section 318(1) of the Bharatiya Nyaya Sanhita, 2023, which replaced the cheating provisions of the Indian Penal Code including Section 420, defines cheating as fraudulently or dishonestly inducing a person by deception to deliver property, and Section 318(4) punishes cheating that induces delivery of property with imprisonment of up to seven years and fine. Illustration (g) draws the line: a person who intends to perform when he takes the money and later breaks the contract "does not cheat, but is liable only to a civil action for breach of contract."
A builder who allotted a flat, sent a draft agreement and later sold to a buyer paying 50 percent looks like the second case unless there is more, such as the flat already promised to another when you paid, or false assurances given after the sale. The complaint goes to the police station under Section 173 of the Bharatiya Nagarik Suraksha Sanhita, 2023. If the station will not register it, Section 173(4) sends you to the Superintendent of Police first, and only then to the Magistrate under Section 175(3) with an affidavit. Section 88 of the RERA Act keeps other laws available alongside it, so a criminal complaint does not bar the RERA claim. It rarely returns money faster, and the steps are in the guide on registering an FIR.
How do I file, and in which order?
File two complaints on the same facts: one before the Authority for the refund with interest and for findings on Sections 11(5) and 13, and one before the adjudicating officer for compensation. Rule 29(1) prescribes Form N for the Authority and Rule 30(1) prescribes Form O for the adjudicating officer's compensation under Sections 12, 14, 18 and 19, each with a fee of one thousand rupees. Section 71(2) asks the adjudicating officer to dispose of an application within sixty days and to record reasons if he cannot. The Karnataka compensation complaint was filed on 27 July 2026 and decided on 7 October 2026.
- Get the sale in writing. Ask the builder by email whether your flat has been allotted or sold to anyone else, and keep any reply.
- Total what you paid from your bank statements and receipts, payment by payment, and leave out every figure you did not pay.
- Save the builder's current price list, website page and any quotation for a comparable flat, with the date you saved them.
- Send a dated notice saying you never sought cancellation or refund, and asking for the flat or a refund with interest and compensation within fifteen days.
- If the flat is still unsold, file with the Authority at once and ask for an order under Section 36 restraining its sale.
- File Form N before the Authority and Form O before the adjudicating officer, with the allotment letter, receipts, emails, draft agreement and your price evidence.
- Diary sixty days from the order, and go back the next day if the builder has not paid. Execution is covered in the guide on executing a RERA order in Karnataka.
What evidence decides a claim like this?
The documents on which the Karnataka order rests were ordinary ones: the allotment letter, the payment receipts, the email communications, the draft agreement for sale, WhatsApp messages, a legal notice, and the builder's own webpage showing the current price range of units in the project. The buyer also produced the sale deed of a plot sold to fund the purchase, to show that the money for the purchase had been raised.
In our practice, the claims that struggle are the ones where the buyer cannot show the builder's side in writing. Assurances given on the phone, a payment plan agreed with a salesman and never confirmed by email, a refund cheque accepted without a covering reservation: each of these lets a builder say you walked away. We also see buyers wait months for the agreement, then lose the chance to stop the sale while the flat was still free. Ask for the agreement in writing at the first delay, keep every reply, and do not sign any cancellation or refund form until you have decided what you are claiming.
Four points to keep in view.
Claim only what you paid
The refund is the booking cheque and the transfers on your bank statement, never a builder's credit, a GST adjustment or the unpaid demand behind the dispute.
Two complaints, two forums
Form N before the Authority for the refund with interest, Form O before the adjudicating officer for compensation, each with a fee of one thousand rupees.
Lost appreciation can count
The adjudicating officer said compensation may be higher where only a refund follows, because the buyer loses both the flat and the rise in its value.
Cheating needs early intent
Under Illustration (g) to Section 318 of the BNS, a party who meant to perform when paid and later broke the deal faces only a civil action.
Frequently Asked Questions
The builder says my booking was cancelled because I did not pay the revised demand. Is that valid?
Section 11(5) lets a promoter cancel an allotment only in terms of the agreement for sale, and you have none. Its proviso lets you approach the Authority against a cancellation that is unilateral and without sufficient cause. A revised demand you never accepted in writing is not a term of any agreement.
Can I claim both a refund and compensation?
Yes. The refund with interest is asked of the Authority, and compensation is adjudged by the adjudicating officer under Section 71. The buyer in the Karnataka case filed both, and the compensation order was passed while the refund complaint was still pending.
What interest will I get on my money?
The Karnataka Rules fix the promoter's rate at the State Bank of India highest marginal cost of lending rate plus two percent, under Rule 16. The period it runs for is for the Authority to decide in your complaint, so plead the dates of each payment.
The builder has offered me another flat at today's price. Do I have to accept?
No. Nothing in the Act obliges you to take a substitute, or obliges the builder to offer one at your old price. If you accept, record it in a signed and registered agreement before you pay more, and treat the price difference as part of your loss if you refuse.
Will the builder be fined for taking more than 10 percent without an agreement?
He can be. Section 61 allows a penalty of up to five percent of the estimated cost of the project for contravening the Act, and on 14 October 2026 the Punjab Authority directed penalty proceedings for a Section 13(1) breach. A penalty is not paid to you, so it does not replace your own claim.
The builder did not appear before K-RERA. Does that mean I get everything I claimed?
No. In the Karnataka case the builder was placed ex parte and the order rested on the buyer's documents, yet the adjudicating officer still assessed the loss and awarded Rs 5 lakh against a claim of Rs 40.5 lakh.
How long does a compensation complaint take?
Section 71(2) asks for disposal within sixty days, with reasons recorded if that is not possible. The Karnataka complaint took about ten weeks against a builder who did not appear. Contested cases usually take several months, so treat any timeline as indicative.
What if the builder does not pay the order?
In the Karnataka order, interest at MCLR plus two percent a year runs from the sixty-first day if the Rs 5 lakh is not paid within sixty days, and the buyer is at liberty to act in law. Go back to the Authority for execution, and if the builder appeals, the guide on a builder's appeal to the Karnataka tribunal explains the pre-deposit.
This article is for general informational purposes only and does not constitute legal advice. Consult a qualified advocate for advice on your specific situation.
Related Guides
- The Builder Wants 20 Percent Before Registering the Agreement for Sale
- The Builder Has Cancelled My Booking for Missed Instalments and Is Forfeiting My Money: What Can I Recover?
- The Builder Has Not Paid My RERA Order: Execution, the Revenue Recovery Certificate and the Deputy Commissioner in Karnataka
