Under Section 18 of RERA, if a builder fails to deliver possession by the project's RERA-registered date, a buyer can choose either a full refund of every amount paid, with interest (commonly set at the SBI Marginal Cost of Funds based Lending Rate plus 2% under most state RERA rules), or to remain in the project and instead claim monthly interest-based compensation for each month of continuing delay until possession is actually handed over.
The buyer's choice -- exit with a refund, or stay and claim compensation
Section 18 gives a delayed buyer two distinct remedies, and the choice is the buyer's, not the builder's.
The buyer can either withdraw from the project entirely and demand the full amount paid back, with interest for
the entire period the money was held, or can choose to remain invested in the project and instead claim
ongoing monthly interest as compensation for each month the delay continues, until possession is finally and
lawfully handed over. This flexibility matters for an NRI buyer weighing whether the project still makes sense
as an investment, versus wanting the capital back to redeploy elsewhere.
How the interest rate is set, and what it applies to
Most state RERA authorities have adopted an interest formula pegged to the State Bank of India's Marginal
Cost of Funds based Lending Rate (MCLR) plus an additional 2 percentage points, applied to the amounts the
buyer has actually paid, for the period of the delay. This rate is reviewed periodically and varies slightly
by state RERA rules, so the precise current figure should be confirmed with a local advocate or checked on the
relevant state RERA authority's published rate at the time of filing.
What counts as a valid delay, and common builder defences
The relevant date is the RERA-registered possession date for the project (which the builder itself
declared at registration), not any informal date mentioned in marketing material or verbal assurances.
Builders sometimes argue force majeure -- genuinely unforeseeable events beyond their control -- to excuse a
delay; RERA authorities and appellate tribunals have applied this defence narrowly, generally rejecting
routine excuses like ordinary funding shortfalls or standard regulatory approval delays that a competent
promoter should have anticipated and planned around.
Common mistakes buyers make when pursuing a delay claim:
- Waiting years past the registered possession date before taking action, during which evidence and
payment records can become harder to organize.
- Not calculating the interest claim against the RERA-registered date, and instead arguing from an
informal date that carries no statutory weight.
- Accepting a builder's informal partial-compensation offer without understanding the fuller Section 18
remedy available through a formal complaint.
Can I get my full money back if the builder is years late on possession?
Yes -- Section 18 lets a buyer withdraw from a delayed project and claim a full refund of every amount
paid, with interest for the period the money was held, rather than being forced to wait indefinitely for
delivery.
What is the current interest rate for a RERA delay claim?
Most states use SBI's MCLR plus 2%, a figure that moves with the underlying benchmark rate -- confirm the
exact current figure with a local advocate or the relevant state RERA authority's published rate before
calculating a claim.
Does a builder’s force majeure claim automatically excuse a possession delay?
No -- RERA authorities have generally read force majeure narrowly, rejecting routine business or funding
difficulties as an excuse; only genuinely unforeseeable, extraordinary events are typically accepted, and even
then usually only for the specific period directly attributable to that event.
