Builder delivers defective house: Can homebuyers claim repair costs and compensation?

Buying a home is one of the biggest financial commitments for most people. But what happens when a newly constructed house develops serious defects and the builder fails to fix them? A recent order by the Kollam District Consumer Commission in Kerala offers an example of the relief a homebuyer may receive when construction does not meet promised standards.

The commission directed a Thiruvananthapuram-based builder to pay a homebuyer ₹25 lakh, including ₹20 lakh towards repair costs and damages and ₹5 lakh as compensation for mental agony and inconvenience, according to an Indian Express report It also awarded ₹25,000 towards litigation expenses.

The order was passed on August 10, 2026, in a complaint filed by Visakh K against Luxury Builders, managed by Jayadevan M V.

What was the dispute?

According to the commission’s order, Visakh entered into an agreement with the builder on January 13, 2022, to construct a residential house at Kalliyoor in Thiruvananthapuram. The agreed cost was ₹32 lakh, with the house to be completed and handed over within six months.

However, construction was completed only on January 20, 2024, and the housewarming took place that month. Visakh alleged that he ultimately paid ₹42,63,450 to the builder, considerably more than the amount mentioned in the agreement.

He also alleged that the builder had promised to use quality materials, including branded bathroom fittings, paint, electrical wires, switches, plumbing materials and tiles.

After taking possession, however, Visakh claimed that he noticed several problems. These included leaking plumbing lines, defective sanitary fittings, peeling paint, cracks in walls and ceilings, uneven flooring, damaged kitchen cupboards, inferior door frames, water seepage through windows, leakage from the staircase pergola and electrical issues.

He also said he had to spend additional money to complete some kitchen work after the builder failed to do it.

Visakh claimed that he repeatedly asked the builder to rectify the defects through oral and written requests, but no action was taken. He subsequently approached the consumer commission.

The builder did not appear before the commission or file its version despite being served notice and was proceeded against ex parte.

What did the inspection find?

The consumer commission appointed an expert commissioner and an advocate commissioner to inspect the house.

The expert found inferior and substandard materials, defective plumbing, dampness and seepage, cracks in walls, inadequate waterproofing and improper slopes in balcony tiling. The report also concluded that the workmanship did not meet standard civil engineering practices.

The advocate commissioner separately noted defects including a damaged section of the concrete pathway, damaged washbasin fixtures and kitchen cabinets, leaking bathroom pipes, inferior sanitary fittings, cracks and deterioration in the terrace concrete, peeling paint and dampness with algae formation on the walls.

The expert concluded that immediate rectification and replacement of defective works and materials were required and held the contractor responsible for the observed defects.

What did the consumer commission rule?

The commission said the builder was obligated under the agreement to construct the house in proper condition and according to normal construction standards.

It found that the builder had failed to fulfil that obligation and that the defects amounted to deficiency in service and unfair trade practice.

The commission therefore directed the builder to pay ₹20 lakh towards the cost of necessary repairs and damages, along with 9% annual interest from January 13, 2022, until the amount is realised.

It also awarded ₹5 lakh as compensation for the mental agony and inconvenience caused to the homebuyer and ₹25,000 towards litigation costs.

The builder was given 45 days from receiving the order to comply. If it fails to do so, the complainant can recover the amount with 9% annual interest and may initiate execution proceedings in accordance with law.

What does this mean for homebuyers?

The case highlights the financial risk of accepting a newly constructed property without ensuring that promised construction standards and specifications have been met.

It also shows the importance of keeping the construction agreement, payment records, correspondence with the builder and other documents relating to promised materials and specifications. In this case, the commission relied on expert and advocate inspections to assess the condition of the property and the quality of construction.

The ₹25 lakh award in this case should not be interpreted as a standard compensation amount for every defective home. The relief ordered was based on the specific facts, evidence and findings in the case.

For a homebuyer facing similar construction defects, the case illustrates that documented evidence of defects and attempts to get the builder to rectify them can become important when seeking relief through the consumer dispute mechanism.