Title Defect Years After Possession? RERA Section 18(2) Has No Time Bar for Bengaluru Buyers
RERA Section 18(2) obliges promoters to compensate allottees for loss caused by defective title of project land, and says the claim is not barred by limitation under any law. With the Section 4(2)(l) title declaration and Section 60 penalty, here is what a Bengaluru buyer should save from day one.
Title trouble rarely arrives on the day you book. It turns up years later: a relative of the original landowner files a suit claiming a share, a revenue record shows a different name, or a bank that financed an earlier owner says its charge was never cleared. By then the flat is built, the buyer has moved in, and the builder may have moved on to three other projects. For Bengaluru buyers in apartments built on land assembled from many owners, this is the scenario worth planning for on day one.
The Real Estate (Regulation and Development) Act, 2016 has a specific provision for it, and one feature of that provision deserves attention: the claim does not run out of time.
The short answer. 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, and that a claim for this compensation shall not be barred by limitation under any law in force. At registration, Section 4(2)(l)(A) and (B) make the promoter declare, on affidavit, that it has legal title to the land and that the land is free from encumbrances, or give details of any encumbrance. The trade-off: no time bar does not mean no proof burden, and you still have to show the loss and connect it to the title defect, so your records from the purchase matter as much as the law.
What does Section 18(2) say?
In the Gazette of India text of the RERA Act, Section 18(2) reads: 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 this 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 phrases carry the weight. "Any loss" is not limited to a refund of price. "Is being developed or has been developed" means the protection covers completed projects, not only those under construction. And the limitation clause removes the usual time bar for this specific claim.
What did the builder have to declare about the land?
Section 4(2)(l) requires a declaration, supported by an affidavit signed by the promoter or an authorised person, as part of the registration application. Clause (A) states 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 the land is owned by another person. Clause (B) states that the land is free from all encumbrances, or gives details of the encumbrances, including any rights, title, interest or name of any party in or over the land.
Those declarations are not just paperwork. Section 11(1) requires the promoter to enter all details of the project provided under Section 4(2) on its web page on the Authority's website, for public viewing. In other words, the promoter's own statement about the land is something a buyer can read before booking, and can hold up later if it turns out to be wrong.
Section 60 adds a regulatory consequence: if any promoter provides false information or contravenes 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 your own compensation claim under Section 18(2).
Read clause (B) closely when you check a project. The Act asks for details of encumbrances including any rights, title, interest or name of any party in or over the land. If the declaration names a landowner under a development arrangement, a lender, or a pending claim, that is the promoter telling you, on affidavit, where the risks sit. A disclosure is not a defect in itself, but it tells you what to ask about, and what should be resolved before your sale deed is registered. Ask the promoter in writing how and when each disclosed item will be cleared.
How is Section 18(2) different from the delay remedies?
Section 18 has three parts, and buyers often know only the first. Section 18(1) deals with failure to complete or give possession as per the agreement, or discontinuance of the business: the allottee who withdraws gets a refund with interest at the prescribed rate plus compensation, and one who stays gets interest for every month of delay until possession. Section 18(3) covers failure to discharge any other obligation under the Act, rules, regulations or agreement, with compensation payable as provided under the Act.
Section 18(2) is the only one of the three that carries an express exclusion from limitation. The table compares them.
| Sub-section | Trigger | Remedy in the text | Express limitation exclusion | Who decides compensation |
|---|---|---|---|---|
| 18(1), withdrawal | Failure to complete or give possession as agreed, or discontinuance of business | Return of amount with prescribed interest, plus compensation | No | Adjudicating officer under Section 71 |
| 18(1) proviso, staying on | Same delay, allottee does not withdraw | Interest for every month of delay until possession | No | As provided under the Act |
| 18(2) | Loss due to defective title of the project land | Compensation in the manner provided under the Act | Yes, not barred by limitation under any law | Adjudicating officer under Section 71 |
| 18(3) | Failure to discharge any other obligation | Compensation in the manner provided under the Act | No | Adjudicating officer under Section 71 |
| Section 60 | False information or breach of Section 4 | Penalty up to 5 percent of estimated project cost | Not applicable | Authority |
Section 71(1) says the Authority shall appoint adjudicating officers, who are or have been District Judges, for adjudging compensation under Sections 12, 14, 18 and 19. Section 72 then lists the factors for fixing the amount: the disproportionate gain or unfair advantage made as a result of the default, wherever quantifiable; the amount of loss caused as a result of the default; the repetitive nature of the default; and other factors the adjudicating officer considers necessary in furtherance of justice. For a title claim, the second factor, the amount of loss, is likely to be central.
What counts as a loss from defective title?
The Act does not list examples, so think in terms of what you would have to prove. A loss could be money spent defending your possession in a title suit, a fall in what you can sell the flat for because a buyer's lawyer flags the defect, a lender refusing to finance a resale, or, in the worst case, losing the flat or a share of the land. The adjudicating officer has to be satisfied that the loss was caused by the defective title, so the link matters.
This is where land history becomes practical. A project's land may have passed through several owners, conversions and development agreements before the first brick. A defect anywhere in that chain can surface later. Our explainers on ostensible owners and later-acquired title under the Transfer of Property Act and on fraud and misrepresentation in a property purchase cover the general law that sits alongside RERA.
Why does the no-limitation clause matter so much?
Most civil claims in India have to be brought within a fixed period. Section 18(2) says this particular claim shall not be barred by limitation provided under any law for the time being in force. For a buyer, that means a title defect discovered ten years after possession is not automatically out of time for a Section 18(2) claim.
The clause does not make the claim easy. Evidence fades, promoters wind up, and documents go missing. That is why the protection is most useful to a buyer who kept the paper trail from the start. If you are buying in a large new project, such as Laurel Maple at Brigade Orchards in Devanahalli, save the registration-time title declaration from the RERA web page the day you book.
What should you do before and after buying?
Treat the promoter's title declaration as evidence you may need years later.
- Download the promoter's Section 4(2)(l) declaration on title and encumbrances from the project's RERA web page and save it with the date.
- Note every encumbrance the promoter disclosed under clause (B), and ask how each will be cleared before handover.
- Have an advocate review the land title chain independently, rather than relying only on the promoter's declaration.
- Keep your agreement for sale, sale deed, payment receipts and possession letter together, since they show what you paid for and when.
- If a title claim surfaces, collect the notice, suit papers or lender letter that shows the defect and the loss it is causing you.
- Record every cost you incur because of the defect, such as legal fees or a failed resale, with receipts.
- File a complaint for compensation under Section 18(2), and remember the claim is not barred by limitation under any law in force.
Frequently asked questions
What does RERA Section 18(2) cover?
Section 18(2) 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 RERA Act, 2016. It applies to both ongoing and completed projects, going by its wording.
Is there a time limit for a defective title claim under RERA?
Section 18(2) says the claim for compensation under that sub-section shall not be barred by limitation provided under any law for the time being in force. You still need to prove the loss and link it to the defective title before the adjudicating officer, so keep your purchase records.
What does the builder declare about land title at RERA registration?
Section 4(2)(l) requires an affidavit-backed declaration that the promoter has legal title to the land, with authenticated documents if the land is owned by another person, and that the land is free from encumbrances, or details of any encumbrances including rights, title or interest of any party.
What penalty applies if the builder gave false information?
Section 60 of the RERA Act says that if any promoter provides false information or contravenes 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. This is separate from your compensation claim.
Last updated 2026-11-14. PropNewz Team.
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