You give down payment for a home, but at the time of the sale agreement you realise that the builder did not deliver on the promised area that was advertised. What happens then? A recent Telangana RERA ruling holds significance for its refund order and penalty on the builder.The case is of a homebuyer who was promised a 5,068.96 sq. ft. villa, but the sale agreement mentioned one that measured only 3,900 sq. ft. The Telangana RERA has come to the aid of the homebuyer in a recent ruling, holding that a builder cannot advertise a villa as having a certain saleable area and then deliver a villa measuring less by treating the remaining as the plot’s “setback area”.The authority observed that representing the property in this manner amounted to a serious misrepresentation of one of its key features, since buyers had paid for what they understood to be a substantially larger villa and later discovered that the actual villa was much smaller.
What the case is about
The ruling followed a complaint filed by P. Krishna Reddy, a homebuyer from Old Bowenpally, Hyderabad, Telangana. Reddy alleged malpractice by a builder based in Chikalguda, Hyderabad, Telangana. Baddam Laxma Reddy was the authorised 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 across roughly 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 through an NEFT transfer. The villa was priced at Rs 3.6 crore and was represented as having a built-up area of 5068.96 sq. ft.The discrepancy came to light when the parties were preparing to execute the sale agreement. Reddy noticed that the area mentioned in the agreement, as well as the corresponding price, did not match what had been represented to him earlier or what appeared in the project brochure.According to Reddy, the builder had initially represented the villa as measuring 5068.96 sq. ft. However, at the agreement stage, the area attributed to the villa was reduced to 3900 sq. ft. The remaining 1169.76 sq. ft. was described as “open space” belonging to the project as a whole.Reddy said he had never previously been informed about this separate open-space component and that the earlier documents did not contain any reference to such a charge.He calculated that the nearly 30% addition attributed to open space effectively meant he was being overcharged by Rs 90 lakh. Reddy described the practice as both unethical and unlawful.
Builder’s argument
The builder disputed these allegations. It maintained that the transaction was not based on a per-square-foot rate and that the sale was not tied to any precise measurement of the villa’s area.The builder further contended that the area figures mentioned in the sale agreement were only indicative and approximate. According to the builder, these figures were included merely as a reference for building plans and municipal requirements and were not intended to determine the sale price or form the basis for any claims regarding the property.The builder further maintained that P. Krishna Reddy knew the villa’s size, design and features from the beginning and had accepted the overall 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 while the agreement was being executed. It also said there had been no discussion about calculating or revising the price on the basis of a per-square-foot rate. Baddam Laxma Reddy, the builder’s advocate, said the open area mentioned by P. Krishna Reddy related 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 booking. He subsequently approached Telangana RERA with a complaint against the builder.
Why homebuyer won the case
On August 24, 2026, the authority ruled in Reddy’s favour, according to an ET report. Separately, the original landowner of the Bentley Woods project, Chittaboina Raj Kumar, has filed an FIR against the builder, alleging cheating 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 promoter cannot change the description of an area from saleable space to “open space” or common area on its own after an Agreement of Sale has been executed.The Authority considered the difference between the 5,068.96 sq. ft. area represented to the purchaser and the approximately 3,900 sq. ft. villa that was actually offered to constitute a material misrepresentation under Section 12 of the RERA Act. On that basis, the purchaser was entitled to exit the project and seek a complete refund along with interest.The promoter’s argument that the 44-villa development could be divided into individual units in order to avoid RERA registration was rejected by the Authority.The promoter was also penalised for not providing the area and charge-wise break-ups required 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 registration presented the gated villa development as a collection of individual plots.This, the authority observed, was inconsistent with the way the properties had been represented to buyers. The sale agreement, the builder’s own marketing material and its online advertisements had 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 villa project. The authority said the composite development appeared to have been artificially divided into individual plots, each measuring less than 500 sq. metres, even though the villas were being 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 a 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.The Telangana RERA authority, however, found that the Agreement of Sale dated October 12, 2024, clearly recorded Rs 20 lakh as the token advance received from P. Krishna Reddy. The builder was unable to produce any document, receipt or correspondence supporting its contention that Rs 15 lakh of this amount was only a notional figure included for the purpose of facilitating a loan.Telangana RERA also found that the builder had misrepresented the villa’s total area. The price list submitted by P. Krishna Reddy described the villa’s “super built-up area” and “total saleable area” as 5068.96 sq. ft. The total price agreed for the property on this basis was Rs 3.8 crore.However, the purchaser was told only at the stage of the sale agreement that 30% of this area, or 1,169.76 sq. ft., represented open space.The authority said that although the law permits a proportionate share of common areas to be included in the saleable area, this must be clearly disclosed to the allottee and specifically mentioned in the Agreement of Sale.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 penalty of Rs 98 lakh (98,03,458) on the builder, with the amount to be deposited into the TGRERA fund.
