More information regarding The Truth About Builder "Assured Returns" Schemes
What Are Assured Return Schemes?
Assured return schemes are real estate investment offers where the builder promises to pay a fixed monthly return until possession is given, or sometimes even beyond. These are common in commercial properties, pre-launch projects, and under-construction flats.
On paper, the investor receives returns of 8%–12% annually until handover. In reality, many builders stop payments mid-way or delay possession indefinitely.
Read our related post: Why builders delay possession for years.
Why Builders Offer These Schemes
Builders typically offer assured returns to raise funds for under-construction projects. Instead of approaching banks or investors, they turn buyers into financiers—without declaring the actual risk involved.
These schemes are often designed to:
- Raise large upfront payments
- Market the project as low-risk or premium
- Create false urgency with “limited offers”
If you’ve ever come across verbal assurances too, read Should You Trust a Verbal Agreement When Buying Land?
Are These Schemes Legal in India?
Technically, assured return offers are not illegal if properly disclosed in the agreement and backed by RERA registration. However, in practice:
- They often lack written agreements
- Builders skip RERA compliance
- Projects are delayed or abandoned mid-way
Many courts have ruled against such schemes when they’re found to be misleading or exploitative. In some cases, they resemble ponzi-type financing.
See: 5 Signs a Real Estate Deal Might Be a Scam
Common Risks for Buyers
Buyers often fall into the trap of “guaranteed income” and end up facing:
- Non-payment of returns after a few months
- Project delays stretching for years
- Difficulty exiting the investment
- Zero resale value of unfinished property
We covered similar risk traps in our guide: The Hidden Legal Costs of Buying a Flat in India
Your Legal Remedies If Cheated
If your builder stops paying assured returns or delays possession, you can:
- Send a legal notice demanding payment or refund
- File a complaint with RERA if the project is registered
- Approach the Consumer Forum for refund + interest
- File a cheating case under IPC 420 if fraud is proven
Be sure to preserve all promotional materials, receipts, and communication. If you’ve booked a flat under such a scheme, review What Happens Legally If You Back Out of a Flat Booking?
Does RERA Protect You?
RERA mandates full disclosure by builders—including payment promises, project timeline, and penalties for delay. If your builder is RERA-registered, you can:
- File an online complaint
- Seek refund with interest
- Demand possession and compensation
For guidance, see our post: Why You Should Always Talk to a Lawyer Before Signing Anything
How to Stay Safe in Future Deals
Before investing in any “guaranteed return” property, make sure to:
- Verify the RERA registration
- Check if assured returns are backed by a written agreement
- Avoid builders with poor delivery history
- Be wary of deals that sound too good to be true
Also consider reading: The Real Meaning of “Ready-to-Move” in Indian Real Estate
Conclusion
Builder assured return schemes often hide major legal and financial risks. While they may look appealing, they lack protection unless clearly structured under RERA and supported by formal contracts.
If you’re already stuck in such a scheme, take legal action quickly. And always read the fine print. Visit our Real Estate Law series to explore other common property traps and your rights under Indian law.
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