When the Land Title Fails: RERA Section 18(2) and Compensation for Bengaluru Buyers

Years after moving in, a group of Bengaluru apartment owners receives a legal notice. A family claiming part of the land under their building says it never consented to the original sale to the developer. The owners have registered sale deeds, and the association has taken over maintenance. But the dispute is about the land beneath them, and the question is who pays if the claim succeeds.

Title disputes over land can be among the hardest problems a flat buyer can face, because they reach back before the buyer's purchase. The Real Estate (Regulation and Development) Act, 2016 addresses them in two ways: it makes the promoter declare title and encumbrances on oath at registration, and it makes the promoter liable to compensate allottees for loss caused by defective title, without a limitation bar. This guide reads both provisions as published in the Gazette of India and sets out what a Bengaluru buyer can check and claim.

The short answer. Section 18(2) of the RERA Act says the promoter shall compensate the allottees in case of any loss caused to them due to defective title of the land on which the project is being developed or has been developed, in the manner provided under the Act, and that the claim shall not be barred by limitation provided under any law for the time being in force. Section 4(2)(l)(A) and (B) require the promoter to declare, on an affidavit, its legal title to the land and whether the land is free from encumbrances, with details of any encumbrance. The trade-off: the Act gives a buyer a lasting claim against the promoter, but compensation depends on the promoter being able to pay, so checking title before booking is still the stronger protection.

What does section 18(2) say about defective title?

The Gazette of India copy of the RERA Act sets out section 18(2) in a single sentence. The promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land, on which the project is being developed or has been developed, in the manner as provided under the Act, and the claim for compensation under this sub-section shall not be barred by limitation provided under any law for the time being in force.

Three features matter. First, it covers land on which a project "is being developed or has been developed", so the duty does not end when construction ends. Second, the measure is loss caused to the allottee, which ties the claim to what the buyer can show was lost. Third, the closing words remove the limitation bar that would ordinarily apply to a claim after a period of years.

Section 18(2) sits beside two other parts of section 18. Section 18(1) deals with refund or interest where the promoter fails to complete or give possession on time, and section 18(3) makes the promoter liable to compensate allottees for failing other obligations under the Act or the agreement for sale. Our report on refund or interest for delayed flats under section 18 covers the delay side.

Why does the limitation point matter?

Under limitation law, many claims must be brought within a fixed period, after which they are barred. Title problems, however, can stay hidden for years. A claim by a co-owner who did not sign the original sale, or a dispute over an old inheritance, may surface long after the buyer has moved in.

The wording of section 18(2) addresses that risk directly. By saying that the claim for compensation shall not be barred by limitation provided under any law for the time being in force, it keeps the allottee's claim against the promoter open even where a defect is discovered late.

This does not mean a buyer should wait. Evidence fades, promoters change and companies can be wound up. A claim made promptly after a defect comes to light is easier to prove and more likely to be paid.

What must the promoter declare about title?

The Act tries to bring title problems into the open before any flat is sold. Section 4(2)(l) requires a declaration, supported by an affidavit signed by the promoter or a person authorised by the promoter, as part of the application for registration.

Clause (A) is a declaration that the promoter has a legal title to the land on which the development is proposed, along with legally valid documents with authentication of such title, if such land is owned by another person. Clause (B) is a declaration that the land is free from all encumbrances or, as the case may be, details of the encumbrances on such land, including any rights, title, interest or name of any party in or over such land, along with details.

The table below sets out how the title provisions work together.

What happens if the declarations turn out to be false?

Section 60 says that if any promoter provides false information or contravenes the provisions of section 4, he shall be liable to a penalty which may extend up to five per cent of the estimated cost of the real estate project, as determined by the Authority.

That penalty is separate from compensation to the buyer. For the buyer, the direct remedy for title loss remains compensation under section 18(2). Section 71 provides that, for the purpose of adjudging compensation under sections 12, 14, 18 and 19, the Authority shall appoint an adjudicating officer, who holds an inquiry after giving the person concerned a reasonable opportunity of being heard. Section 72 lists factors the adjudicating officer shall have due regard to, including the amount of loss caused as a result of the default and the repetitive nature of the default.

Section 7 also allows the Authority to revoke registration where the promoter has engaged in unfair practices or fraudulent practices, or has defaulted in doing anything required under the Act. Where a title problem involves such practices, revocation is one of the options open to the Authority, which is why the separate project account matters. Our explainer on the 70 percent separate account rule covers the money side of the same affidavit.

How can a Bengaluru buyer check title before booking?

Compensation after the event is a fallback. The better protection is to understand the title before paying. Start with the promoter's own declarations on the Karnataka RERA project page, and read clauses (A) and (B) closely. If the promoter holds the land under a joint development agreement with the landowners, the declaration should say so and refer to the authenticated documents.

Then look beyond the affidavit. A lawyer can trace the chain of title back through earlier sale deeds, partitions and inheritances, check land records and encumbrances in the registration records, and confirm that every person with an interest in the land has joined the transaction. For apartments, ask how the land is held for the project and how your undivided share of the land will be conveyed.

Take the time to do this even for a well known developer. The section 18(2) claim is against the promoter, and its value depends on the promoter's ability to pay when the claim is made.

What should a buyer do if a title defect comes to light?

If you receive a notice or learn of a claim over the land, act in a structured way. Use this checklist:

1. Keep the notice or claim document and note the date you received it.
2. Inform the promoter in writing and ask for its response and the title documents.
3. Tell your association so that affected owners can coordinate.
4. Check the title and encumbrance declarations on the project's RERA page.
5. Take legal advice on the claim and on any loss you may suffer.
6. Record your loss, such as legal costs or any effect on resale or loans.
7. File for compensation under section 18(2) with the adjudicating officer if needed.

Section 31 also allows any aggrieved person to file a complaint with the Authority or the adjudicating officer for any violation or contravention of the Act. Where many owners are affected, a coordinated claim keeps the evidence together.

What do Bengaluru buyers ask about defective title under RERA?

Can I claim compensation if the builder's land title is defective?

Yes. Section 18(2) of the RERA Act says the promoter shall compensate the allottees for any loss caused due to defective title of the land on which the project is being developed or has been developed, in the manner provided under the Act. Compensation is adjudged by an adjudicating officer under section 71.

Is there a time limit for a defective title claim under RERA?

Section 18(2) says the claim for compensation for loss due to defective title shall not be barred by limitation provided under any law for the time being in force. Even so, a prompt claim is easier to prove and more likely to be recovered from the promoter.

What does the builder declare about title at RERA registration?

Under section 4(2)(l), the promoter files an affidavit declaring legal title to the land, with authenticated documents if the land is owned by another person, and that the land is free from all encumbrances or details of any encumbrances, including rights, title or interest of any party.

What is the penalty for a false title declaration?

Section 60 says a promoter who provides false information or contravenes section 4 is liable to a penalty which may extend up to five per cent of the estimated cost of the project, as determined by the Authority. This penalty is separate from compensation to buyers under section 18(2).

Last updated 2026-10-18. PropNewz Team.