Buyer promised builder 5,069 sq ft villa, but delivered only 3,900 sq ft: Telangana RERA seeks refund of Rs 20 lakh and fine of Rs 98 lakh

You put down the down payment on a house, but at the time of the sales agreement you realize that the builder did not meet the promised area that was advertised. What happens then? A recent Telangana RERA ruling has significance for its order of refund and penalty to the builder.The case involves a homebuyer who was promised a villa measuring 5,068.96 square feet, but the sales agreement mentioned one measuring only 3,900 square feet. The Telangana RERA has come to the homebuyer’s aid in a recent ruling, holding that a builder cannot advertise a villa as having a certain salable area and then deliver a villa measuring less by treating the rest as the “setback area” of the plot.The authority noted that representing the property in this way amounted to a serious misrepresentation of one of its key features, as buyers had paid for what they understood to be a substantially larger villa and later discovered that the actual villa was much smaller.

What is the case about?

The ruling came following a complaint filed by P. Krishna Reddy, a homebuyer from Old Bowenpally, Hyderabad, Telangana. Reddy alleged negligence on the part of a builder based in Chikalguda, Hyderabad, Telangana. Baddam Laxma Reddy was the authorized representative of the builder.Reddy said he first came across advertisements for the builder’s upcoming gated villa project on Facebook and Google as well as through physical banners put up around Bowenpally and Kompally.The project, named ‘Bentley Woods’, is situated in Quthbullapur mandal in Medchal-Malkajgiri district. Spread over approximately 2.7 acres, the development comprises 44 villas.On October 12, 2024, Reddy said he paid a token advance of Rs 20 lakh for one of the villas. The payment consisted of Rs 15 lakh in cash and Rs 5 lakh via NEFT transfer. The villa was priced at Rs 3.6 million and was depicted with a constructed area of ​​5,068.96 square metres. footThe discrepancy came to light when the parties were preparing to execute the purchase and sale contract. Reddy noted that the area mentioned in the agreement, as well as the corresponding price, did not match what he had been previously represented or what appeared in the project brochure.According to Reddy, the builder had initially planned the villa to measure 5,068.96 square feet. However, in the agreement phase, the area attributed to the villa was reduced to 3,900 square meters. The remaining 1,169.76 square feet was described as “open space” belonging to the project as a whole.Reddy said he had never been told about this separate open space component before and that previous documents did not contain any reference to such a charge.He estimated that the nearly 30% addition attributed to open space meant he was being overcharged by Rs 90 lakh. Reddy described the practice as unethical and illegal.

The constructor argument

The builder refuted these accusations. He maintained that the transaction was not based on a per square foot fee and that the sale was not linked to any precise measurement of the villa’s area.The builder further stated that the area figures mentioned in the sales contract were only indicative and approximate. According to the builder, these figures were simply included as a reference for construction plans and municipal requirements and were not intended to determine the sales price or serve as a basis for claims on the property.The builder further maintained that P. Krishna Reddy knew the size, layout and features of the villa from the beginning and had accepted the full price after considering these details.According to the builder, Reddy did not raise any objection to the terms at any stage of the negotiations or during the execution of the agreement. He also said there had been no discussion about calculating or revising the price on a per-square-foot rate basis. Baddam Laxma Reddy, advocate for the builder, said the open area mentioned by P. Krishna Reddy relates to the setback portion within the individual plot.Concerned about the money he had already paid and the legal status of the project, which did not have RERA registration, Reddy chose to withdraw from the reservation. He later approached Telangana RERA with a complaint against the builder.

Why the home buyer won the case

On August 24, 2026, the authority ruled in favor of Reddy, according to an ET report. On the other hand, the original land owner of the Bentley Woods project, Chittaboina Raj Kumar, lodged an FIR against the builder, alleging fraud and criminal breach of trust.Ravi Charan Pentapati, partner at Dentons Link Legal, explained to ET the key reasons behind P. Krishna Reddy’s success before Telangana RERA:Telangana RERA held that a developer cannot change the description of an area from salable space to “open space” or common area on his own after a Sale Agreement has been executed.The Authority considered that the difference between the area of ​​5,068.96 sq ft represented to the buyer and the villa of approximately 3,900 sq ft actually offered constituted a material misrepresentation under Section 12 of the RERA Act. On this basis, the buyer had the right to abandon the project and request a full refund plus interest.The Authority rejected the promoter’s argument that the 44-villa development could be divided into individual units to avoid RERA registration.The promoter was also penalized for not providing the required area and charge divisions under the Telangana RERA Rules.The Telangana RERA authority noted that the builder obtained RERA registration only after the authority raised questions about the project. However, the registry presented the gated villa development as a set of individual plots.This, the authority noted, was inconsistent with the way the properties had been represented to buyers. The sales agreement, the builder’s own marketing material and its online advertisements repeatedly and clearly described the properties as “villas”, rather than plots.According to Telangana RERA, the contradiction between marketing and registration indicated an attempt to avoid registration of the development as a village project. The authority said the compound development appeared to have been artificially divided into individual plots, each measuring less than 500 square metres. meters, although the villas were sold with common infrastructure.Telangana RERA condemned the use of such tactics by the builder, stating that the alleged conduct amounted to cheating, violated Section 3 of the RE (R&D) Act and made the builder liable for penalty.The builder also disputed Reddy’s claim that he had paid Rs 20 lakh, maintaining that the amount actually received from him was only Rs 5 lakh.However, the Telangana RERA authority found that the sale agreement dated October 12, 2024 clearly recorded Rs 20 lakh as token advance received from P. Krishna Reddy. The builder could not produce any document, receipt or correspondence to support his claim that Rs 15 lakh of this amount was just a hypothetical figure included for the purpose of facilitating a loan.Telangana RERA also found that the builder had misrepresented the total area of ​​the village. The price list submitted by P. Krishna Reddy described the “overbuilt area” and “total salable area” of the villa as 5,068.96 square metres. ft. The total agreed price for the property on this basis was Rs 3.8 million.However, only at the sales agreement phase was the buyer told that 30% of this area, or 1,169.76 square feet, represented open space.The authority said that although the law allows a proportionate share of common areas to be included in the salable area, this must be clearly disclosed to the successful bidder and specifically mentioned in the Sale Agreement.Based on the findings, the Telangana RERA authority directed the builder to refund the Rs 20 lakh paid by P. Krishna Reddy. It also imposed a fine of Rs 98 lakh (98,03,458) on the builder, and the amount will be deposited in the TGRERA fund.