Best Builder Stopped Assured Return / Lease Rental Payments Lawyer

Through the 2010s, a large number of commercial projects in Gurugram, Noida and Greater Noida were sold with a promise that sounded hard to refuse: pay most of the price upfront, and the builder will pay you a fixed monthly return until the project is complete, then lease the unit out and pay you rent, or guarantee a minimum rent for a few years. These were called assured returns, committed returns, lease guarantees or simply "monthly rentals".

For a while, the payments came in. Then, for many investors, they stopped. Some builders blamed a slowdown. Many pointed to the Banning of Unregulated Deposit Schemes Act, 2019, saying the law no longer allowed them to pay. Meanwhile the projects themselves often slipped years behind schedule. This page explains where investors stand, the routes available, and the questions that decide which route is right.

How these schemes were usually structured

The details varied, but most assured return arrangements had some combination of the following.

• A booking for a commercial unit: a shop, office space, food court unit, service apartment or studio, sold under a "down payment" or "possession-linked" plan in which the buyer paid a large share of the price, often 80% to 100%, at booking.
• A monthly return on the amount paid, payable from booking until completion or until the unit was leased. Rates in the NCR were often quoted as a fixed sum per square foot per month or a percentage of the amount paid.
• A lease clause under which the buyer authorised the builder, or a related company, to lease out the unit after completion, often as part of a larger "anchor" lease, with the builder guaranteeing a minimum rent for a period.
• A separate document, such as a memorandum of understanding, addendum or "assured return letter", rather than the main builder-buyer agreement. This matters a lot, as we'll see.

Before you can decide what to do, you need to know exactly which documents you signed, who signed them for the builder, and what they say about returns, leasing and what happens if the builder stops paying.

Why payments stopped

Investors usually hear one of three explanations.

"The BUDS Act prohibits it." The Banning of Unregulated Deposit Schemes Act, 2019 banned unregulated deposit schemes and made accepting deposits outside regulated categories an offence. Some builders read it as making assured returns unlawful and stopped paying overnight. The Act's definition of "deposit" excludes certain advances received in connection with the consideration for immovable property, where the advance is adjusted against that property under the agreement. Whether a particular assured return arrangement falls inside the ban depends on how it was structured. It's also worth noticing that the BUDS argument, even where it has some force for future arrangements, is a strange reason for a builder to keep the investor's money while refusing both the return and the property.

"The market is bad." A commercial slowdown or a failed anchor tenant isn't a legal excuse for not paying a contractual return, although it may be a practical reason the builder can't pay.

"The return was only until a certain date." Sometimes the builder is right: the return period has genuinely ended under the documents. More often, the documents link the end of the return to completion or leasing, and neither has happened.

Is RERA the right forum?

This is the first big question, and it hasn't always had a clear answer.

The case for RERA is straightforward. A commercial unit buyer is an "allottee" under the Real Estate (Regulation and Development) Act, 2016, whatever the purpose of the purchase. If the project is delayed, Section 18 gives the allottee the same choice as a home buyer: refund with interest, or interest for every month of delay. And where the assured return is part of the agreement for sale, a failure to pay it is arguably a failure by the promoter to perform its obligations under that agreement, which the authority can address.

The difficulty is that RERA authorities have taken different views over time on whether they can enforce assured return clauses as such, particularly where the return was promised in a separate document rather than the agreement for sale, or where the return looks more like a financial arrangement than a term of the sale. Some benches have declined to enforce returns and confined themselves to delay and refund. Others, including in Haryana, have treated assured returns as part of the promoter's obligations and directed payment. The position can also depend on whether the BUDS Act issue is raised and how the authority views it.

In practice, we look at the current approach of the authority that governs your project, the exact wording of your documents, and what you want: the unit, the returns, or your money back. Those three answers usually point clearly to one forum.

The other routes

Refund under RERA

Even if the authority won't enforce the assured return itself, a delayed commercial project gives you the same Section 18 rights as a delayed flat. If the builder hasn't completed the project and given possession by the agreed date, you can withdraw and claim a refund of the amount paid with interest at the prescribed rate. Assured returns already received are usually taken into account, so the net figure is lower, but for investors who simply want out, this is often the cleanest route.

Insolvency proceedings

Assured return investors have a notable history in insolvency law. In Nikhil Mehta v. AMR Infrastructure (2017), the National Company Law Appellate Tribunal treated buyers under an assured return arrangement as financial creditors, because the arrangement had the commercial effect of a borrowing. In 2018, the Insolvency and Bankruptcy Code was amended to treat allottees of real estate projects as financial creditors generally, and the Supreme Court upheld that in Pioneer Urban Land v. Union of India (2019).

Since 2020, a Section 7 petition by allottees needs at least 100 allottees of the same project, or 10% of the total allottees, whichever is less. Insolvency is a heavy tool: it freezes other proceedings, hands control to a resolution professional, and may or may not lead to a better outcome. It's usually considered where the builder is genuinely in distress and other routes are failing. See our page on builder insolvency.

Civil suit or arbitration

Where the return was promised in a separate MoU or investment agreement, a civil suit for recovery, or arbitration if the document contains an arbitration clause, may be the natural route for the return itself. These are slower than RERA but well suited to enforcing a contractual payment obligation. Where the amount is large and the documents are clear, a summary suit may be available.

Consumer forum

Consumer commissions are often less suitable for assured return claims, because a person who buys a commercial unit for profit may not be a "consumer" under the Consumer Protection Act. There are exceptions, for example where a buyer bought a small unit to earn a livelihood by self-employment, but investors should generally assume this route is harder.

Criminal complaint

Where the facts show the scheme was dishonest from the start, money was diverted, or the same unit was sold twice, a criminal complaint may be appropriate alongside a civil remedy. That's a serious step and should be based on evidence, not frustration.

Questions that decide your strategy

• Which document contains the promise? The agreement for sale, an addendum to it, a separate MoU, a letter, or a lease deed?
• What triggers the end of the return? Completion, offer of possession, leasing, a fixed date, or something else?
• Has the project been completed? Is there an occupancy certificate? Has the unit been leased?
• How much have you received in returns so far, and how much have you paid?
• Is the builder solvent? Is it paying anyone? Is there an insolvency petition already pending?
• Do other investors in the project have the same problem? Collective action changes the options, especially for insolvency.
• What do you want? The unit and a tenant, the arrears of returns, or a refund?

Lease guarantee disputes after completion

A different set of problems arises when the project is complete and the builder was supposed to lease out the units. Common complaints include:

• the builder hasn't leased the unit at all, and pays nothing;
• the builder leased the whole floor to an anchor tenant at a low rent and pays investors a fraction of the guaranteed minimum;
• the builder collects rent from tenants but doesn't pass it on; or
• the investor wants to take the unit back and lease it independently, but the builder refuses to hand it over.

Here the documents are everything: the lease authorisation you signed, the rent guarantee terms, the duration, and your rights to terminate. These disputes often belong in civil courts or arbitration, but where possession or conveyance hasn't been given, RERA may still have a role.

Common builder defences, and how they hold up

"Assured returns were a goodwill gesture, not a contractual obligation." If the promise is in a signed document, with a rate and a period, it's very hard to describe it as goodwill. Builders sometimes point to a line saying the return is "at the sole discretion of the company". Whether that saves them depends on how the document reads as a whole, and on how the promise was marketed to you.

"You've already received more than you paid." Investors in some early schemes did receive large returns before payments stopped. Returns received are relevant to the final calculation, but they don't extinguish the builder's obligation to deliver the unit or refund the price.

"The returns ended when we offered possession." The question is whether the offer was valid, meaning backed by an occupancy certificate, and whether the documents tie the end of returns to possession, completion or leasing. A "possession offer" for a commercial unit in an incomplete building is often no offer at all.

"Your unit is part of a combined lease; you can't take it back." Many commercial projects pooled units for leasing to a single large tenant. Whether you can exit the pool depends on the lease authorisation you signed and the terms of the head lease. If you're bound in, the builder still owes you the rent share it promised.

"RERA has no jurisdiction over assured returns." This is a genuine and sometimes successful argument. It's the reason forum choice matters. Where it's likely to succeed, a refund claim under RERA, or a civil or arbitral claim for the return itself, may be better.

What not to do

• Don't sign a fresh "restructuring" agreement that converts your unit to a different project, reduces your return to zero, or waives arrears, without legal advice. Some of these documents are fair compromises. Many are not.
• Don't stop pursuing the claim because the builder is "about to get funding". That message has been sent to investors in many NCR projects for years.
• Don't ignore limitation in civil claims. Unlike RERA, civil suits for recovery of money are subject to the Limitation Act. A claim for returns that stopped long ago may be partly time-barred in a civil court. Take advice early.
• Don't rely on informal assurances from sales staff. Get everything in writing.

Where we can help

We act for investors in commercial projects in Gurugram, Noida, Greater Noida and Ghaziabad before RERA authorities, appellate tribunals, civil courts, arbitral tribunals and, where needed, the NCLT. We can work with an individual investor or coordinate a group, which often makes the most sense in projects with hundreds of similarly placed buyers. We'll start by reading your documents and telling you plainly which route is realistic and what it is likely to cost.

Working out what you're owed

Before choosing a forum, it's worth putting numbers on the claim, because the figures often decide the strategy. We usually prepare three calculations side by side.

• Refund route. Total paid, minus returns received, plus interest at the RERA prescribed rate from each payment date. Some authorities net off returns differently, so we run the numbers both ways.
• Stay and claim route. Arrears of assured return from the date payments stopped until today, at the contractual rate, plus delay interest under Section 18 if the authority treats the two as distinct, with the obvious risk that the authority declines to enforce the return.
• Civil or arbitral route. Arrears of the return under the separate document, with interest as the contract or the law allows, subject to limitation.

Looking at all three together usually makes the choice obvious. If the refund figure is close to or higher than the other two and the builder is shaky, a refund claim is often the most reliable path. If the project is complete and leased, and the arrears are large, pursuing the return makes more sense.

Projects taken over or revived

A number of stalled NCR commercial projects have been taken over by new developers, revived through insolvency resolution plans, or brought under state rehabilitation schemes. If that's happened to your project, your claim may have changed. In an insolvency resolution, for example, the approved plan may decide what investors receive, and claims not filed in the process may be lost. In a takeover under Section 15 of RERA, the new promoter steps into the old promoter's obligations, but the terms approved by the authority matter. If your project has changed hands, send us the takeover or resolution documents along with your own, and we'll tell you what survives.

Keeping records while you decide

Whatever you decide, keep a clear record from now on: every communication from the builder, every payment received or missed, every notice about leasing or completion. If you were receiving returns by bank transfer, download the statements now rather than later. Investors who come to us with a neat folder of documents and a simple spreadsheet of payments in and out save themselves both time and fees.

Assured returns and the RERA registration of the project

One useful and often overlooked source of information is the project's own RERA registration. When a commercial project was registered as an ongoing project after 2017, the builder had to disclose details such as the number of units sold, the amounts collected, the expected completion date and, in many cases, its existing obligations. Some builders also had to file details of encumbrances and pending litigation. If the registration says nothing about the assured returns the builder owed to hundreds of investors, or shows a completion date that the builder has already missed, that's relevant both to the authority and to any insolvency or civil claim.

The quarterly updates on the RERA portal are also worth downloading. They sometimes show that construction stopped well before the builder stopped paying returns, or that the builder was collecting money from new buyers while telling old ones it couldn't pay. Patterns like these don't just help your case. They can change the authority's view of the builder's conduct as a whole.

A note on expectations

Assured return disputes are among the more complicated real estate matters we handle, because they sit between property law, contract law, deposit regulation and insolvency. The law has developed unevenly, and outcomes vary between authorities. We'll tell you if we think your claim is strong, and we'll also tell you if we think the realistic aim is to recover your principal with some interest rather than every rupee of the returns you were promised. Investors who go in with clear expectations tend to make better decisions about settlements and timing.

An illustration

A simplified, made-up example to show how the pieces fit.

An investor booked a 500 square foot office unit in a Gurugram commercial project in 2014 for Rs 40 lakh and paid 95% upfront. A separate letter promised a monthly return of Rs 65 per square foot until the unit was leased after completion. Payments came in until early 2019 and then stopped, with the builder citing the BUDS ordinance. The project was due in 2017 and has no occupancy certificate in 2024.

The investor's options include: a RERA complaint seeking a refund of Rs 38 lakh with interest under Section 18, with the returns received taken into account; or a RERA complaint for delay interest plus arrears of assured return, if the authority's current approach supports it and the investor wants to keep the unit; or a civil claim for the arrears under the return letter; or joining other investors in an insolvency petition if the builder is in serious distress. The right choice depends on the builder's financial position, the authority's current view, and whether the investor still believes in the project.

How we approach these cases

1. Collect every document: booking form, agreement, addenda, assured return letters or MoU, lease authorisations, payment proofs, and a record of every return received.
2. Map the promise: where it was made, what triggers its end, and what the builder agreed to do if it couldn't lease the unit.
3. Check the project status on the RERA portal and with the development authority, including any insolvency proceedings against the builder or group companies.
4. Review the current approach of the relevant authority and tribunals to assured return claims.
5. Advise on the route, with an honest view of cost, time and risk for each option.
6. Coordinate with other investors where collective action would help.
7. File and pursue the chosen remedy, and enforce the result.

Documents to gather

• Application form and allotment letter
• Builder-buyer agreement and all addenda
• Any assured return letter, MoU, investment agreement or "committed return" document
• Lease authorisation, lease deed or rent guarantee, if any
• Payment receipts and bank statements
• A statement of all returns received, with dates, and any TDS certificates
• Letters from the builder explaining why returns stopped
• Any communication about leasing, tenants or rent

Frequently asked questions

Did the BUDS Act make assured returns illegal?

Not necessarily. The BUDS Act bans unregulated deposit schemes, but its definition of deposit excludes certain advances received towards the price of immovable property and adjusted against it. Whether a particular arrangement falls within the ban depends on its structure. In any event, the Act doesn't entitle a builder to keep an investor's money while giving neither the return nor the property.

Can RERA order the builder to pay assured returns?

Authorities have taken different views. Some have enforced assured returns forming part of the promoter's obligations; others have confined relief to delay interest or refund. The answer depends on your documents and the authority's current approach.

Can I get a refund of my investment?

If the project is delayed beyond the agreed completion date, yes, under Section 18. Returns already received are usually taken into account.

Am I a consumer if I bought a shop to earn rent?

Often not, because the purchase was for commercial purposes. There are exceptions, such as a small unit bought for self-employment. RERA doesn't depend on this question.

Can investors file insolvency against the builder?

Yes, as financial creditors, if they meet the threshold of 100 allottees of the same project or 10% of total allottees, whichever is less, and the default is at least Rs 1 crore.

The builder leased the unit but pays me less than the guaranteed rent. What can I do?

That's a breach of the rent guarantee if the documents support you. Depending on the documents, the remedy may lie in a civil claim, arbitration, or, where possession or title is also in issue, a RERA complaint.

Is the assured return taxable?

Returns received are generally treated as income, and builders often deducted tax at source. Discuss the treatment of arrears and refunds with your chartered accountant.

Should I join the other investors?

Usually yes. Investors in the same project typically face the same documents and the same builder defences. Coordinated action reduces cost and opens up options, like insolvency, that an individual can't use alone.

General information on assured return disputes. The law in this area has developed through conflicting decisions; check the current position before acting. Not legal advice. Examples are illustrations only.