In response to numerous complaints from homebuyers, the Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) has instructed all developers to immediately halt the practice of handing over incomplete apartments, often referred to as "canvas flats" or bare shell units. The authority warned that any violation of this directive could result in penalties of up to 5 per cent of the total cost of the real estate project.

The directive, issued on May 8 under Section 37 of the RERA Act, 2016, clearly states that possession of an apartment can only be offered once the unit is fully completed, all promised amenities are in place, and a registered sale or lease deed has been executed. This move is intended to safeguard homebuyers from being forced to accept unfinished properties, which UP-Rera has categorized as both illegal and a serious breach of the law, according to a report published in the Hindustan Times.

Mahendra Verma, Secretary of UP-Rera, stated that promoters found violating these rules could face fines of up to 5 per cent of the total project cost under Sections 38 and 61 of the RERA Act. He further explained that the authority had observed instances where some developers, during the execution of the Agreement for Sale (BBA), were coercing allottees into accepting physical possession of unfinished units. In many such cases, these units were being handed over without meeting the legal criteria. This practice, Verma noted, went against the spirit and letter of the RERA Act and its rules, ultimately defeating the purpose of the buyer protection framework established by the legislation. Consequently, the authority found it necessary to issue firm directives to ensure developers adhere strictly to the law and that the interests of homebuyers are not compromised.

According to Uttar Pradesh building bylaws, developers are required to obtain multiple no-objection certificates (NOCs) — including approvals related to fire safety, clearance of dues, and the provision of amenities such as parks, lifts, and swimming pools — before they can apply for an Occupancy Certificate (OC). Once all criteria are fulfilled, the Noida Authority inspects the project site. Officials confirmed that only after the OC is granted can possession be legally transferred; doing so beforehand is considered illegal.

The regulatory body also clarified that physical possession of a flat is permissible only after the builder secures a valid completion or occupancy certificate from the appropriate authority. Furthermore, developers are not allowed to demand more than 10 per cent of the property cost without first executing a registered agreement with the buyer.

The order defines a “ready-to-move-in” unit as one where all internal work — including flooring, plumbing, electrical fittings, fire safety installations, doors, windows, and other finishing elements — is fully completed, in accordance with the details mentioned in the project brochure and the sanctioned layout plan. As per Rule 1.8(3) of the UP Agreement for Sale Rules, 2018, the quoted price must cover land costs, construction charges, development fees, and all committed amenities. Any deviation from this is considered a breach of contract.