UP RERA Issues Fresh Guidelines For Stalled Projects, Clarifies Refund Liability

The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has recently reissued fresh guidelines governing refund claims in stalled housing projects. It has clarified that a group of allottees or a competent authority completing such projects will not be liable to satisfy refund orders passed earlier against the original promoter.

It also withdraws the authority's earlier Office Order dated June 20, 2023. In its place, the Authority has laid down a revised framework governing refund claims and their enforcement in such projects.

The revised guidelines follow the Uttar Pradesh Real Estate Appellate Tribunal's judgment dated December 19, 2024, in Major Sandeep Thapa v. Uttar Pradesh Real Estate Regulatory Authority & Others.

The dispute arose from Antriksh Realtech Private Limited's Antriksh Sanskriti Phase-2 and Antriksh Sanskriti Phase-3 projects.

In its judgment, the tribunal quashed Paragraph 18 of UP RERA's Office Order dated July 4, 2023.

The provision had laid down guidelines for completion of the remaining development works of the two Antriksh projects after cancellation of their registration. It also permitted the original promoter to undertake the remaining development work. The tribunal held that the provision was beyond the authority's powers under the Real Estate (Regulation and Development) Act, 2016.

The Authority also noted that promoters of projects financed through the Special Window for Affordable and Mid-Income Housing (SWAMIH) Investment Fund-I had been relying on the June 20, 2023 office order before various High Courts to seek keeping complaints in abeyance. According to the authority, this was affecting the interests of homebuyers.

The Authority further observed that permitting refunds while the remaining development work was underway could put pressure on the project's financial resources. It noted that this could hamper completion of the project. At the same time, it recorded that the SWAMIH Fund's financing framework contains financial provisions for refunds in accordance with the Authority's orders.

Taking note of these developments, the Authority, in its 203rd meeting held on May 22, 2026, decided to withdraw the June 20, 2023 office order and issue the revised guidelines.

The withdrawn office order had laid down the procedure for dealing with refund claims in projects being completed under Section 8 of the Act after cancellation of registration. Under that framework, homebuyers would generally not be permitted to exit such projects by seeking refunds during the completion process. It also provided that execution of refund orders would ordinarily remain in abeyance until the project was completed.

The earlier framework also applied where the original promoter had been permitted to complete the remaining development works under Sections 6 and 37 read with Section 8 of the Act with the consent of the majority of the allottees. It also covered projects financed through the SWAMIH Investment Fund-I.

Under the revised framework, where a group of allottees or a competent authority undertakes the remaining development work under Section 8 after cancellation or expiry of the project's registration, neither of them will be liable to satisfy refund amounts awarded under earlier orders passed against the original promoter.

The Authority may, however, issue recovery certificates against the original promoter. The demand covered by such recovery certificates cannot be recovered from the assets of the project concerned.

The revised guidelines also lay down the procedure for dealing with fresh refund complaints.

If an allottee seeks a refund while the remaining development work is underway, the bench may advise the allottee to defer the hearing of the complaint. It may explain that granting refund relief at that stage could place pressure on the financial resources required to complete the project.

Should the allottee nevertheless press the complaint, the authority will decide it on its merits. Even if a refund is granted, implementation will remain in abeyance until completion of the project.

The Authority has further clarified that where the original promoter has been permitted to complete the remaining development work under Sections 6 and 8 read with Section 37 of the Act with the consent of all the allottees or group of allottees, complaints will continue to be decided on their individual merits in accordance with the prescribed procedure.

Complaints relating to projects financed through the SWAMIH Investment Fund-I or any other fund established by the Authority will likewise be decided on their individual merits after following the prescribed procedure.

The office order comes into force with immediate effect.

In a separate letter dated July 6, 2026, UP RERA also expressed concern over instances of promoters collecting GST from allottees at rates higher than those prescribed.

It directed all registered promoters and real estate agents in Uttar Pradesh to strictly comply with the applicable GST rates. The Authority also asked them to refund any excess GST collected from allottees in accordance with the CBIC and State Tax Department circulars.