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.
Legal Commentary & Landmark Judgments: Section 12
Section 12 of RERA establishes the promoter's strict legal liability for the veracity of advertisements and prospectuses, entitling affected allottees to full refund with interest and compensation for false representations.
Crucially, if the person affected intends to withdraw from the proposed project, he must be returned his entire investment along with interest at the prescribed rate and compensation under the Act.
Section 12 elevates sales brochures, website renders, and sample flats into legally binding statutory warranties. Promoters can no longer hide behind standard contractual disclaimers stating that 'artistic impressions and brochures do not form part of the legal contract'.