Authorities & RERA
RERA and Possession Delay: What You're Entitled To
The most-used provision in the whole Act. And the two clauses in your agreement that builders use to blunt it.
The short answer
If the builder misses the possession date in your agreement, Section 18 gives you a choice:
(a) STAY — and receive interest for every month of delay, until you get possession; or
(b) WITHDRAW — and receive a full refund, with interest.
The choice is yours. Not the builder's. And they cannot force you to take one or the other.
What Section 18 gives you
If the promoter fails to complete or is unable to give possession of an apartment in accordance with the terms of the agreement for sale, by the date specified therein — the promoter is liable, on demand by the allottee, to:
(a) Return the amount received, with interest and compensation, where the allottee wishes to withdraw; or
(b) Where the allottee does not wish to withdraw — pay interest for every month of delay, till the handing over of possession.
'On demand by the allottee.' Four words that put the choice in your hands.
Which should you choose?
| STAY — take interest for the delay | WITHDRAW — take a refund with interest | |
|---|---|---|
| You get | The flat, eventually, plus interest for every month you waited | All your money back, with interest |
| Best when | Construction is genuinely progressing. The delay is 6–18 months. You still want this flat, and prices in the area have risen. | Construction has stopped. The builder is in trouble. The delay is years with no end in sight. Or you simply no longer want it. |
| Risk | The project may still never finish — and you are still in it | You may have to find another flat in a market that has moved |
| What the builder wants | This one — they keep your money | They will resist this hard |
This is the most important decision an aggrieved allottee makes, and it turns on one question: IS THE BUILDING ACTUALLY BEING BUILT? Go and look. Then look at the quarterly progress filings on the RERA portal. A project that has stopped filing has usually stopped building — and interest on money in a dead project is a poor consolation.
The two clauses builders use to blunt Section 18
1. The grace period
Many builder-buyer agreements grant the promoter a grace period — commonly 6 to 12 months beyond the declared possession date — before any delay penalty begins.
So the flat is a year late, and the builder owes you nothing, because the agreement gave them a year.
Find that clause before you sign. Ask for it to be shortened or removed. It is negotiable at the agreement stage — and it is worth more than most things people do negotiate.
2. Force majeure
Force majeure excuses a delay caused by things genuinely beyond the promoter's control — a natural disaster, a war, a court order stopping construction.
That is reasonable. What is not reasonable is a clause drafted so broadly that it excuses almost anything: “any circumstance beyond the reasonable control of the promoter” is doing an enormous amount of work in that sentence.
Read the clause. Narrow it if you can. And note that a shortage of labour, or a funding problem, or the builder's own poor planning, are not force majeure — however they are described.
The interest rate — and the asymmetry test
RERA prescribes the rate — typically SBI's highest marginal cost of lending rate plus 2%, though the exact formulation varies by state's rules.
Find two numbers in your builder-buyer agreement:
1. The interest the builder charges you for a late instalment.
2. The interest the builder pays you for late possession.
Under RERA these should be the SAME rate. Section 2(za) defines a single 'interest' rate applicable to both.
In practice, many agreements — including those signed after 2017 — still quietly favour the builder. 18% from you, a token amount from them.
If they differ, say so, and ask for it to be corrected before you sign. It is a lawful request, it is a reasonable one, and their answer tells you a great deal about the next four years.
What to do if your possession is late
- Check the RERA portal for the declared possession date — not the one the sales team mentioned. That declared date is what Section 18 runs from.
- Check the grace period in your agreement.
- Look at the quarterly progress filings. Is the project still being built? A project that has stopped filing has usually stopped building.
- Go and look at the site. Or send someone.
- Write to the builder formally, by registered post. Demand possession, or state your Section 18 claim. Keep the receipt.
- Find the other allottees. A group complaint is far more effective.
- Decide: stay or withdraw? Base it on whether the building is actually being built.
- File the RERA complaint. You do not need a lawyer.
It is tempting. It feels like leverage. It can go badly wrong.
If you stop paying, the builder may claim you are in default — and try to cancel your allotment and forfeit your money.
File the complaint first. Ask the Authority for a direction. Do not take unilateral action on a contract you are a party to, without knowing where you stand.
Frequently asked questions
What are my rights if my flat possession is delayed?
Under Section 18 of RERA you choose one of two things, and the choice is yours: stay in the project and receive interest for every month of delay until possession; or withdraw entirely and receive a full refund with interest. The builder cannot force you into either.
What is a grace period in a builder-buyer agreement?
An additional period — commonly 6 to 12 months — that many agreements grant the promoter beyond the declared possession date, before any delay penalty begins. So the flat can be a year late and the builder owes you nothing, because the agreement gave them a year. Find that clause before you sign, and ask for it to be shortened or removed.
Should I withdraw or stay if my project is delayed?
It turns on one question: is the building actually being built? If construction is genuinely progressing and the delay is 6-18 months, staying and taking interest usually makes sense. If construction has stopped and the builder is in trouble, interest on money in a dead project is poor consolation — take the refund. Go and look at the site, and check the quarterly progress filings on the RERA portal.
What interest rate does RERA prescribe for delay?
Typically SBI's highest marginal cost of lending rate plus 2%, though the exact formulation varies by each state's rules. Crucially, RERA requires the SAME rate to apply both ways — what the builder charges you for a late instalment, and what they pay you for late possession. Many agreements still quietly favour the builder. Find both numbers.
Can I stop paying instalments if my project is delayed?
Do not do this without advice. It feels like leverage, but if you stop paying, the builder may claim YOU are in default, cancel your allotment and forfeit your money. File the RERA complaint first and ask the Authority for a direction.