If your builder has missed the agreed possession date, you are legally entitled to either monthly compensation for every month of delay or a full refund with interest — under Section 18 of RERA. This right exists regardless of what your Builder-Buyer Agreement says.
The Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted specifically to protect home buyers from delayed projects, false promises, and opaque dealings by builders.
RERA changed everything:
— Builders must register every project with the state RERA Authority before launching.
— Builders must disclose the project layout, completion timeline, and financial details publicly.
— Any delay in possession entitles the buyer to compensation under Section 18 — and this right cannot be contractually excluded.
— State RERA Authorities are required to pass orders within 60 days of a complaint.
— RERA orders are enforceable like decrees of a civil court.
Section 18 gives you two options if your builder has delayed:
Option 1 — Continue and claim monthly interest: Stay invested and receive interest for every month of delay from the promised possession date. The rate is SBI MCLR + 2% per annum (approximately 10–11% in most states) on the total amount paid.
Option 2 — Withdraw and claim full refund with interest: Exit the project entirely and receive a refund of every rupee paid, with interest from the date of each payment.
The choice is yours — Section 18 cannot be overridden by any contractual clause, including force majeure or penalty cap clauses.
Choose monthly interest compensation if:
— The project is substantially complete and possession is imminent.
— You still want the flat and believe the builder will deliver.
— You have a home loan and returning the money is complex.
Choose full refund with interest if:
— The project has been stuck for years with no visible progress.
— The builder is facing financial trouble or insolvency.
— You have found an alternative property.
In both cases, the RERA legal notice is your first step — it formally puts the builder on notice and often leads to a settlement.
Section 18 of RERA, 2016 entitles a home buyer to either withdraw and receive a full refund with interest or continue and receive monthly interest for every month of delay — regardless of the Builder-Buyer Agreement. Section 31 allows buyers to file complaints directly before the state RERA Authority.
Important deadline: Delay interest under Section 18 RERA accrues from the date possession was originally due — so act early to maximise your claim. RERA complaints must be filed within 5 years from the date of cause of action.
Common scenarios our users face, with specific guidance.
My builder offered me possession but without the Occupancy Certificate (OC) — can I refuse?
Yes — you have the right to refuse possession without a valid Occupancy Certificate. Possession without an OC means the building has not received municipal approval for occupation, which creates legal, safety, and financial risks (home loan disbursements may be affected, utilities may not be connected officially). Your legal notice should demand OC as a condition of possession, and cite Section 18 RERA if possession is delayed while the OC is obtained.
My builder sent a possession letter but the flat has major construction defects — do I still have to take possession?
You are not obligated to accept possession of a flat with material defects. Under Section 14 of RERA, a builder is obligated to rectify structural defects reported within 5 years of possession without additional charge. If defects are present before possession, demand in writing (legal notice) that they be rectified before handing over — and specify a timeline. Do not sign the possession letter until defects are fixed or specifically recorded.
My builder is in insolvency proceedings (IBC) — what happens to my RERA rights?
The interplay of RERA and the Insolvency and Bankruptcy Code is complex. Once insolvency proceedings are admitted, there is typically an automatic moratorium that pauses individual actions. However, home buyers are financial creditors under IBC and must file their claims with the Resolution Professional. RERA proceedings filed before insolvency admission may continue. Consult a lawyer immediately if your builder has entered IBC — the timeline for filing claims is strict.
The builder delayed possession by 2 years and is now offering a small 'goodwill compensation' to settle — should I accept?
Do not accept a 'goodwill' settlement without calculating your full entitlement under Section 18 RERA. The compensation you are legally owed (SBI MCLR + 2% per annum on the total amount paid, for each month of delay) is likely far more than what the builder is offering informally. Send the legal notice, quantify your exact claim, and use that as the baseline for any settlement negotiation.
I bought a flat from an NRI (Non-Resident Indian) reseller — does RERA still protect me?
RERA protections apply based on the project registration, not the identity of the seller. If the project is RERA-registered, all buyers — including those buying from resellers — have access to the RERA Authority for complaints about project delays. However, your direct contractual claim for delay compensation would be against the original developer, not the reseller, unless the resale agreement specifically addresses this.
Everything you need to know before taking action.
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