Builder Not Paying Transit Rent or Corpus During Redevelopment? Action Plan

Who this guide is for

This guide is for flat owners and members of a housing society whose building is being redeveloped, where the developer agreed to pay transit rent (monthly displacement compensation while you live elsewhere) and a corpus amount, and has now stopped paying or never started. It is useful if:

• You vacated your flat on the developer's promise of monthly rent and that rent has stopped or never arrived.
• The agreed corpus or hardship amount was not paid on the date fixed in the agreement.
• You are a managing committee member of a society trying to hold a defaulting developer to the redevelopment agreement.
• The project is delayed, the developer is dodging calls, and members are paying rent out of their own pocket while waiting for possession.

It applies most directly to society redevelopment in States where redevelopment is common, such as Maharashtra, but the basic discipline — agreement, minutes, demand, regulator or court — works across India. The exact rules, the role of the registrar of cooperative societies, and whether a project falls under RERA vary by State and by project, so always confirm the position for your State and take professional advice on the larger claims.

If you are still at the consent stage and the agreement is not yet signed, read the companion guide first: Apartment Redevelopment Agreement: Owner Consent Checklist.

What you can do this weekend

Friday evening

Find the registered redevelopment agreement and the permanent alternate accommodation agreement if you signed a separate one. Read the clauses that fix the transit rent amount, the payment dates, the corpus amount and its due date, and any escalation of rent over time. Highlight them. Note the exact figures and the dates on which each payment was due.

List, month by month, what was due and what was actually received. Pull your bank statements and match each credit. Make a simple table: month, amount due, amount received, shortfall. This table is the backbone of every notice and complaint you will send.

Check whether the agreement mentions a bank guarantee or any security given by the developer to the society. If it does, note the bank, the amount, the validity period and the conditions for invoking it. A bank guarantee that is about to expire needs urgent attention.

Saturday

Contact your society's managing committee and the secretary. Ask for certified copies of the minutes of meetings where the redevelopment terms, the developer's payment obligations, and any earlier defaults were discussed. The development agreement is normally between the society and the developer, so the society's records are central.

Speak to other affected members. If transit rent has stopped for several members, a coordinated demand from the society carries far more weight than scattered individual complaints. Agree on a common record of who is owed how much and from when.

Confirm whether the project is registered under your State RERA. Search the State RERA portal by project name, developer name or registration number. Note the RERA registration number, the promised completion date, and the developer's declarations. Save screenshots and download the project page if the portal allows.

Sunday

Draft a formal demand notice to the developer using the template in this guide. Attach your month-by-month shortfall table and reference the exact clause of the registered agreement. Have the society sign it where the dues are society-wide; an individual member can also send their own notice for member-wise rent.

Decide your route based on what you found: bank guarantee invocation, RERA complaint, the arbitration clause in the agreement, consumer forum, or civil suit. Where the amounts and stakes are large, line up a property lawyer for a paid consultation early in the week. Getting the first notice and the choice of forum right saves months later.

Organise your evidence into a single folder — agreement, minutes, bank statements, RERA printout, correspondence — numbered and indexed, ready to attach to whichever complaint you file.

Documents and evidence checklist

Step-by-step action plan

Step 1 — Read the agreement and pin down the exact obligation

Everything starts with the registered redevelopment agreement. Find the clause that fixes the transit rent — the monthly amount, the payment date each month, any annual increase, and how many months it covers. Find the corpus clause — the lump sum, when it falls due, and to whom it is paid. Note any clause that says rent continues until possession or a completion certificate is obtained. These figures and dates are your claim. Do not paraphrase them; quote them.

Step 2 — Build the shortfall record

Prepare a clear table of what was due against what was paid, month by month, with running totals. Anchor it to your bank statements so every figure is provable. Do the same for the corpus if it was due and not paid. This single document turns a vague grievance into a precise, quantified demand that a regulator or court can act on.

Step 3 — Get the default into the society minutes

The society is usually the party to the agreement, so its records matter. Ask the managing committee to formally record the developer's default in the minutes of the next meeting — the months unpaid, the total, and the decision to issue a demand. Obtain certified copies. If you are an individual member, write to the committee in writing so your complaint is on record even if the committee is slow to act.

Step 4 — Send a formal written demand notice

Send a dated demand notice to the developer at the address in the agreement, by a method that gives proof of delivery (registered post or courier with tracking, plus email). State the clause, the unpaid amounts, the shortfall table, and a clear deadline to pay. Keep the delivery proof. A documented demand is a precondition for almost every escalation that follows, and it often prompts payment on its own.

Step 5 — Check and, if needed, invoke the bank guarantee

If the agreement required the developer to furnish a bank guarantee to the society, this is one of your most direct remedies. Read the guarantee text carefully — the amount, the validity date, and the exact conditions for invocation. If the developer is in default and the conditions are met, the society can move to invoke the guarantee through the issuing bank before it expires. Because invocation must follow the wording precisely, have the society's lawyer confirm the procedure and draft the invocation letter. Do not let a guarantee lapse while you wait.

Step 6 — Choose the right forum

Your route depends on the facts. If the project is RERA-registered and the dues relate to the developer's project obligations, a complaint to the State Real Estate Regulatory Authority is often the most focused option, and the society or members can file it. If the agreement has an arbitration clause, that may be the contractual route for recovering rent and corpus. The consumer forum can be appropriate where there is deficiency in service. A civil suit for recovery and specific performance remains available. These forums sometimes overlap and sometimes exclude each other, so take legal advice before filing rather than after.

Step 7 — File the complaint with full evidence

Whichever forum you choose, file with the complete bundle: the registered agreement, the shortfall table, the bank statements, the society minutes, the demand notice with delivery proof, and the RERA printout. A well-organised, indexed filing is decided faster and more favourably than a thin one. State precisely what you want — payment of the arrears, continuing rent until possession, the corpus, interest, and costs.

Step 8 — Use RTI in parallel for the approvals trail

While your main case proceeds, use RTI to gather records held by public authorities — sanctioned plans, commencement and occupancy records, and registration details. These do not come from the private builder; they come from the municipal body, planning authority or registrar. They can expose gaps between what the developer promised and what was actually approved or completed, strengthening your case. See the RTI section below for exactly what to ask and from whom.

Escalation ladder

Copy-paste demand notice template

Replace the text in square brackets with your own details before sending. Have a lawyer review it for large claims.

When RTI can help

The Right to Information Act, 2005 applies to public authorities — municipal corporations, planning and development authorities, and the registrar of properties or cooperative societies. It does not apply to a private builder. So RTI cannot force the developer to pay, but it can quietly build the documentary backbone of your case by getting records the developer would rather you did not see:

• Sanctioned plans and approvals: File an RTI with the PIO of the municipal body or planning authority asking for the sanctioned building plan, commencement permission, and any revised approvals for the redevelopment project at [your address]. Mismatches between what was sanctioned and what the developer promised are powerful evidence.
• Completion and occupancy records: Ask whether an occupancy or completion certificate has been applied for or issued for the project, and on what date. This tests the developer's claim about how close the project is to completion.
• Registration details: Ask the registrar's office for certified details of the registered redevelopment agreement and any related instruments, if your society copy is incomplete.
• Society regulator records: Where the cooperative-society registrar holds records about the redevelopment approval process, an RTI can surface the official correspondence.

To file, see our step-by-step RTI filing guide. The fee for Central government authorities is the prescribed nominal amount (State fees vary), and the PIO must respond within 30 days. If you get no reply or an evasive one, use the first appeal under RTI Section 19. For grievances against the public authority's conduct, CPGRAMS with RTI can help. For deeper strategy, The RTI Playbook covers using RTI in complex disputes.

When RTI will not help

Be realistic about RTI's limits in this kind of dispute:

• RTI cannot recover your money: Only a forum that can order payment — RERA, arbitration, the consumer commission or a civil court — can make the developer pay. RTI supports those proceedings; it does not replace them.
• The developer's private books are out of reach: A private builder's bank accounts, internal accounts, or board decisions are not accessible through RTI. You get those, if at all, through disclosure in litigation.
• It is not a fast track: RTI runs on a 30-day clock and is best used in parallel, not as your primary remedy. For speed, the demand notice, the bank guarantee, and the RERA or arbitration route do the heavy lifting.
• A purely private society may be outside RTI: Whether a particular cooperative society is itself covered by RTI varies; the safer targets are the municipal, planning and registration authorities that clearly are public authorities.

Common mistakes to avoid

• Treating transit rent as a favour: It is a binding contractual obligation in a registered agreement. Frame every demand around the clause, not around goodwill.
• Relying on verbal assurances: Phone promises and WhatsApp "next week" messages are not a record. Put every demand in writing with proof of delivery and get defaults into the society minutes.
• Letting the bank guarantee lapse: A guarantee has an expiry date. If you wait too long to invoke it, you lose a direct recovery route. Diarise the expiry and act in time.
• Acting in scattered, uncoordinated ways: Individual members each sending different demands weakens the case. Coordinate through the society where the dues are society-wide, while preserving each member's individual claim.
• Filing in the wrong forum: RERA, arbitration, consumer forum and civil court are not interchangeable, and choosing wrong wastes months. Confirm the right route for your facts and State before filing.
• Not checking RERA registration: Many members assume the project is unregulated when it is in fact RERA-registered, with its own faster complaint mechanism. Search the State RERA portal first.
• Skipping the lawyer on a large claim: Where months of rent and a substantial corpus are at stake, a paid consultation is a small fraction of the amount at risk. Get the first notice and the choice of forum right.
• Assuming RTI alone will solve it: RTI gathers evidence from public authorities; it does not order the builder to pay. Use it alongside your main remedy, not instead of it.

For related disputes, see our guides on recovering a security deposit a landlord will not return and illegal rent increase, lock-in and notice-period disputes. If a developer's delay has also affected an insurance payout you were counting on, see health insurance claim partly paid with deductions.