Section 12: Obligations of promoter regarding veracity of the advertisement or prospectus
Where any person makes an advance or a deposit on the basis of the information contained in the notice advertisement or prospectus, or on the basis of any model apartment, plot or building, as the case may be, and sustains any loss or damage by reason of any incorrect, false statement included therein, he shall be compensated by the promoter in the manner as provided under this Act:
Provided that if the person affected by such incorrect, false statement contained in the notice, advertisement or prospectus, or the model apartment, plot or building, as the case may be, intends to withdraw from the proposed project, he shall be returned his entire investment along with interest at such rate as may be prescribed and the compensation in the manner provided under this Act.
Scope of section 12
Section 12 provides a remedy to the buyer if he has been deceived by the builder. If the builder made a false promise, prepared frivolous prospectus or advertisement about his apartment, building or plots then he shall return entire investment of the buyer along with interest.
Incorrect information towards the real estate project, false statement of builder and exhibition of false model apartment or flat are the basis to claim a refund. The buyer can invoke section 12 of RERA Act if the above elements are existing. If the builder has been delaying the project or fails to give the possession of the apartment on the date specified in the agreement then the buyer may invoke Section 18 of the RERA Act instead of Section 12. Delay in giving possession is no ground for invoking this section.
Return of entire investment along with the interest
The buyer has a right to claim the whole investment along with the interest at such rate as prescribed under the RERA. Buyer sustains loss or damages if the builder gives false statement or incorrect information regarding the building or apartment. It is in the interest of buyer to give him an option to withdraw from such project and get entire investment along with interest. Consequently, section 12 of the RERA Act provide such a remedy to the buyer.