Builder Delay Compensation Under RERA (Section 18)
You booked a flat, paid on time, and the builder still has not given possession. This is one of the most common problems home buyers face. RERA gives you a clear right to compensation for the delay. You can claim interest for every month of delay, or walk away with a full refund plus interest. This guide explains your rights under Section 18 and how to claim.
Quick summary
- Section 18 of RERA covers delay in possession.
- You can continue and claim monthly interest, or exit and get a full refund with interest.
- The interest rate is usually SBI's highest MCLR plus 2%, around 10 to 11%.
- Taking possession late does not cancel your right to delay compensation.
- If the builder refuses, you file a complaint with your state RERA authority.
What Section 18 gives you
Section 18 of the Real Estate (Regulation and Development) Act says that if a builder fails to hand over possession by the date in the agreement, the buyer has two choices. This is a strong right, and the RERA authority enforces it. To understand how RERA protects buyers overall, read how RERA makes home buying safer.
Your two options
| Option | What you get |
|---|---|
| Continue with the project | Interest for every month of delay, until you get possession |
| Exit the project | Full refund of the money paid, plus interest on it |
You choose. If you still want the home, stay and claim monthly interest. If you have lost faith, exit and take your money back with interest. The choice is yours, not the builder's.
How the interest is calculated
The rate is set by the rules, usually SBI's highest marginal cost of lending rate (MCLR) plus 2%. In most states this works out to about 10 to 11% a year. The formula is simple:
Delay interest = Amount paid × (SBI MCLR + 2%) × delay months ÷ 12
Example
Say you paid Rs 50 lakh and possession is delayed by 12 months. At about 10.5%, the interest for the year is around Rs 5.25 lakh. That is what the builder owes you for the delay, on top of giving you the flat.
Possession does not waive your claim
Many buyers think that once they take the keys, they cannot claim for the past delay. That is wrong. Accepting possession does not cancel the interest for the months the builder was late. You can take the flat and still claim delay compensation for the earlier period. Keep this in mind before you sign any "no dues" or "full and final" letter the builder may push.
How to claim step by step
- Check the possession date written in your builder buyer agreement.
- Send a written notice to the builder asking for possession or compensation.
- If there is no response, file a complaint with your state RERA authority, online in most states.
- Attach the agreement, payment receipts and the delay details.
- Attend the hearings. RERA usually decides within a few months.
- The authority can order the builder to pay interest or refund your money.
For the complaint process in detail, read how to file a RERA complaint.
What if the project is not registered with RERA
If the project should have been registered but is not, that itself is a violation. You can still approach RERA and also the consumer forum. Smaller or older projects that fall outside RERA can be taken to the consumer commission for deficiency in service. For a wider view of your options, see flat possession delay and refund rights.
Frequently asked questions
What compensation do I get for delayed possession?
Interest for every month of delay at about SBI MCLR plus 2%, or a full refund with interest if you exit the project.
Can I get a refund if the builder is very late?
Yes. Under Section 18 you can withdraw from the project and claim a full refund of what you paid, along with interest.
What is the interest rate for delay?
Usually SBI's highest MCLR plus 2%, which is around 10 to 11% a year in most states.
Does taking possession cancel my claim?
No. You can accept the flat and still claim interest for the months the builder was late.
Where do I file the claim?
With your state RERA authority, online in most states. Attach the agreement, receipts and delay details.
How long does a RERA case take?
Many cases are decided within a few months, though it varies by state and workload.
Can the builder blame delays on approvals or force majeure?
Builders often do, but only genuine, proven force majeure events reduce liability. Routine approval delays are usually not accepted as an excuse.
Do I need a lawyer for a RERA complaint?
Not always. Many buyers file on their own. A lawyer helps in complex or high-value cases.
What documents do I need?
The builder buyer agreement, all payment receipts, the allotment letter and any communication about the delay.
Can a group of buyers file together?
Yes. Buyers in the same project often file jointly or as an association, which shares cost and effort.
Delay compensation is your legal right, not a favour. Keep your agreement and receipts safe, send a written notice, and use RERA if the builder does not pay. Before buying your next home, check the builder's track record among registered projects.
