Can a Builder Charge Holding Charges from an Allottee? HREAT Reaffirms the Position. Under the Real Estate (Regulation and Development) Act (RERA) and Supreme Court rulings, holding charges levied by a builder are largely illegal. Developers cannot charge buyers for failing to take possession of a flat. If you are facing this issue, you can file a formal complaint with the relevant RERA Authority.
The Haryana Real Estate Appellate Tribunal (HREAT) has once again reiterated an important principle under real estate law: a promoter cannot levy holding charges upon an allottee merely because possession has not been taken.
In a recent order, the Tribunal dismissed a review application filed by a developer seeking reconsideration of an earlier decision that restrained the levy of holding charges on the allottee.
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Holding Charges RERA
What Were the Arguments?
The developer argued that the earlier order had incorrectly relied upon the judgment of the Supreme Court in DLF Home Developers Ltd. v. Capital Greens Flat Buyers Association. According to the developer, this aspect required reconsideration through a review petition.
The Tribunal examined the contention and found that the Supreme Court had already approved the view that promoters are not entitled to impose holding charges on allottees. Similar principles had also been followed in multiple decisions of the Tribunal.
Scope of Review Jurisdiction
The Tribunal emphasized a fundamental legal principle: a review petition is not an appeal in disguise.
Relying upon a recent Supreme Court decision, the Tribunal observed that review jurisdiction is extremely limited. It can only be exercised to correct an apparent error or prevent miscarriage of justice. It cannot be used merely because a party wishes to re-argue issues already decided after a full hearing.
The Tribunal noted that the developer was effectively attempting to reopen and re-argue matters that had already been considered and adjudicated.
Holding Charges and Homebuyers
The order reinforces the position that builders cannot automatically burden allottees with holding charges. Such charges have repeatedly come under judicial scrutiny, particularly where possession-related disputes arise.
The decision is significant for homebuyers because it strengthens consumer protection principles underlying the real estate regulatory framework. It also serves as a reminder that contractual terms must operate within the boundaries of law and judicial precedents.
Key Takeaways
- Review proceedings cannot be used as a substitute for an appeal.
- Courts and tribunals exercise review jurisdiction only in exceptional circumstances.
- Judicial precedents continue to discourage the levy of holding charges on allottees.
- Consumer protection remains a central objective of real estate regulation.
- Developers seeking review must demonstrate a clear and apparent error rather than merely disagreeing with the outcome.
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Key Rules & RERA Implications
- Landmark Ruling: The Hon’ble Supreme Court (in DLF Home Developers Ltd. vs. Capital Greens Flat Buyers Association) ruled that a developer having received the sale consideration has nothing to lose by holding possession. Thus, developers cannot impose holding charges on buyers. [1, 2, 3]
- Delayed Possession: If the builder delayed project completion and the offer of possession is well past the committed date, they are in default and liable to pay you delayed possession interest. [1, 2]
- No OC/CC, No Possession: A builder cannot demand possession charges or penalize you for delayed taking of possession if they have not secured the mandatory Completion Certificate (CC) or Occupation Certificate (OC) from the local authorities
When Might a Builder Be Right?
- Maintenance Charges: Once a valid OC/CC is received and a valid offer of possession is made, the builder is legally allowed to charge Common Area Maintenance (CAM) charges. [1, 2, 3]
- Unpaid Dues: If you intentionally delayed paying your installments after the project was ready and possession was offered, the builder may charge interest for that specific delay, but not arbitrary “holding penalties”
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What to Do Next
- Submit a Written Protest: Send a formal written reply via email or registered post challenging the charges citing RERA guidelines. Remind the builder of the Supreme Court’s prohibition on holding charges. [1]
- File a Complaint: If the issue isn’t resolved, you can file a standard complaint with your state’s Real Estate Regulatory Authority. For buyers in Punjab, use the RERA Punjab Online Portal to initiate the process. For those in Haryana, visit the Haryana RERA Official Portal. [1, 2]
Conclusion
The Haryana Real Estate Appellate Tribunal’s decision reaffirms settled legal principles relating to review jurisdiction and the impermissibility of re-hearing matters through review applications. It also strengthens the judicial trend against imposing holding charges on allottees, thereby promoting fairness and accountability within the real estate sector.
By Satish Mishra Advocate. More on 99888-17966
Source: Haryana Real Estate Appellate Tribunal Order dated 03.06.2026.
