What RERA says about delay

Section 18 is the single most quoted provision of the RERA Act, and for good reason. It is the clause that rewrites the old asymmetry — where a builder could collect 95% of the sale price, miss the handover by years, and hide behind a token penalty clause in the buyer-builder agreement — into a clean, enforceable right. The section says, in plain language, that if the promoter fails to complete or is unable to give possession of an apartment, plot or building in accordance with the terms of the agreement for sale, or duly completed by the date specified therein, the promoter shall be liable on demand to return the amount received from the allottee with interest, at such rate as may be prescribed, including compensation.

Three things follow from this. First, the right is triggered by the agreement-for-sale date, not the marketing brochure date. If the sale deed says December 2026 and the brochure promised June 2026, the brochure does not count. Second, the buyer can choose between exit (refund with interest) and stay (interest on the amount paid until actual handover). You cannot claim both; you have to elect. Third, the interest is not a goodwill gesture from the builder — it is a statutory liability that the RERA authority can enforce on demand.

Before RERA, a two-year delay on a ₹1 crore booking typically attracted a token ₹5 per square foot per month penalty under the buyer-builder agreement — ₹50,000–₹70,000 total on a typical 1,200 sq ft apartment. Under Section 18 today, the same buyer can claim 10–11% simple interest per annum on the paid amount for the full delay period, which on ₹80 lakh paid over two years works out to roughly ₹17 lakh. The difference is the difference between a nuisance settlement and a real remedy.

The compensation formula

Almost every state has prescribed the same formula, copied directly from the model rules: interest = SBI one-year MCLR + 2 percent, simple interest. The SBI MCLR is refreshed on the first working day of every month and published on the bank’s website. You use the rate applicable on the date of default, not the date of the complaint. Karnataka, Maharashtra, Haryana, Telangana, Tamil Nadu, Uttar Pradesh — all follow this model, with minor variations in how the interest is compounded (most are simple; a few adjudicators have awarded compound).

A worked example

Suppose you booked a ₹1.2 crore flat in Gurugram, paid ₹90 lakh in construction-linked instalments over two years, and the agreed possession date was December 2024. As of April 2026, the builder has not handed over. The default period is 16 months. SBI’s one-year MCLR in December 2024 was around 9%, so the applicable rate is 11% simple interest per annum.

Monthly interest on ₹90 lakh at 11% p.a. simple = (90,00,000 × 11%) / 12 = ₹82,500 per month. For 16 months of default, you are entitled to ₹13,20,000 in delay interest, over and above the paid principal. If the delay continues for another 10 months before handover, you accrue an additional ₹8,25,000. The numbers are not trivial. They are also not hypothetical — this is exactly what well-documented Section 18 orders award, routinely, in every state tribunal.

What counts as “amount paid”

The amount on which interest runs is the money you have actually paid to the builder — not the full sale consideration. If you have paid 60% of the total, interest runs on that 60%. GST, stamp duty and registration charges do not count as “paid to the builder” for Section 18 purposes; they are separate payments to the government and are not part of the interest base.

The five-step escalation path

Most delay disputes settle at step two or three. Almost none go all the way to execution. But the discipline of walking up the ladder, step by deliberate step, is what separates buyers who extract real compensation from those who settle for a token goodwill amount on an email.

1. Written notice to the promoter

   A formal letter, not an email, sent by registered post with acknowledgement due, reciting the agreement date, possession date, and Section 18 right. Demand a specific outcome within 30 days — either a concrete revised handover date with interest for the intervening period, or a refund. A template is at the bottom of this guide. This step alone resolves roughly a third of disputes, because it tells the builder you understand your rights.

2. Complaint on the state RERA portal

   If the notice does not produce a written response within 30 days, file Form M (or the state’s equivalent) online. Upload the sale agreement, payment receipts, the notice and its acknowledgement card, and a short statement of facts. The filing fee is ₹1,000 in most states, ₹5,000 in a few. You do not need a lawyer at this stage — many complaints are self-represented.

3. Hearing before the Adjudicating Officer

   The RERA authority assigns the matter to an Adjudicating Officer, typically a retired district judge. Hearings are held in person or virtually, and most matters conclude in 2 to 4 hearings spread over 4 to 8 months. The builder’s counsel will often offer a settlement at the first hearing — sometimes a genuine revised handover, sometimes a low-ball refund. Evaluate against your Section 18 entitlement, not against the original sale price.

4. Order and monetary direction

   The Adjudicating Officer issues a written order either directing the builder to hand over by a specific date with interest for the intervening period, or directing refund of the paid amount with interest. Orders are uploaded to the RERA portal and are enforceable as if they were decrees of a civil court. The builder has 60 days to appeal to the Real Estate Appellate Tribunal (REAT).

5. Execution if the builder does not comply

   If the 60-day compliance window lapses without payment, you file a recovery application with the District Collector, who treats the RERA order as arrears of land revenue. The Collector can attach and auction the builder’s bank accounts, moveable property, and even specific real-estate assets. In 2025, RERA authorities in Maharashtra, Karnataka and Haryana collectively executed over ₹1,200 crore in delay orders through this route.

A realistic timeline

The timeline from notice to enforceable order varies substantially by authority, depending on hearing slot availability and the builder’s willingness to drag proceedings. As a rough guide:

Most of the timeline variation is hearing-slot scarcity, not complexity. A contested Section 18 matter takes about 6 hours of actual hearing time across all dates combined; the rest is the calendar gap between dates. In Gurugram, dates are a month apart; in Mumbai, they can be three months apart.

What compensation actually looks like by state

The formula is identical, but the amounts awarded vary by state because MCLR changes, payment patterns differ, and some adjudicators round generously while others stick to the decimal. A quick comparison of realistic outcomes on a ₹1 crore flat with ₹70 lakh paid and a 20-month delay:

Karnataka

Bangalore matters typically settle at SBI MCLR + 2%, simple interest, on the paid amount. On ₹70 lakh, 20 months, 11% p.a., expect an award of roughly ₹12.8 lakh in delay interest plus possession within a defined window (usually 6 months from the order). Karnataka adjudicators are known for ordering specific handover dates and following up on compliance at a subsequent hearing — not just monetary relief.

Maharashtra

MahaRERA adjudicators apply the same formula but are historically more willing to sanction a full refund if the builder is financially stressed. On the same ₹70 lakh, 20 months, expect either ₹12.8 lakh delay interest with continued possession, or a full refund of ₹70 lakh plus interest at 11% from the date of each payment — which can add another ₹10–14 lakh depending on the payment schedule. Refund awards in MahaRERA tend to run 15–20% higher in total than continued-possession awards on the same facts.

Haryana

HRERA Gurugram is the fastest and also the most formulaic. Orders cite MCLR + 2% almost verbatim, and awards on the same ₹70 lakh, 20-month fact pattern typically land at ₹12.5–13 lakh with a fixed handover date. HRERA is also the most aggressive on execution — builders with multiple outstanding orders find their under-construction bank accounts attached within weeks of the compliance window closing.

Three case patterns, illustrative

The following are composite patterns drawn from publicly available adjudication orders, stripped of identifying details. They are not real cases; they are realistic archetypes of what Section 18 orders look like in practice.

Pattern 1: The mid-size builder stretched too thin

A Gurugram high-rise, ₹3.2 crore booking, ₹2.4 crore paid over 30 months on a construction-linked plan. Agreed possession December 2023; as of October 2025, the building is at 80% structural completion but zero finishes. The builder has a portfolio of four simultaneously delayed projects. Outcome pattern: HRERA Gurugram typically orders continued possession within 9 months of the order date, with delay interest at MCLR + 2% on the paid amount for the period December 2023 to actual handover. Refund is offered as an alternative at the buyer’s election. Total monetary relief in this pattern: ₹55–65 lakh, typically paid in instalments tied to construction milestones.

Pattern 2: The large builder in a soft market

A Bengaluru gated community, ₹1.8 crore booking, ₹1.5 crore paid. Agreed possession June 2024; as of April 2026, construction is complete but the occupancy certificate is stuck with a civic authority over a drainage clearance. Builder is financially sound but the delay is real. Outcome pattern: Karnataka RERA typically directs the builder to secure the OC within a defined period (3 to 6 months) and pay interest for the OC-delay period. Builders in this pattern usually accept rather than appeal, because the interest bill on a single unit is much smaller than the reputational cost of a public delay order. Total monetary relief: ₹9–13 lakh plus actual handover.

Pattern 3: The insolvent or promoter-exited project

A Mumbai redevelopment stuck because the original promoter ran out of capital. ₹2.4 crore booking, ₹1.8 crore paid, agreed possession March 2022, construction paused at 40% since early 2024. Outcome pattern: MahaRERA typically directs a full refund with interest, triggers the RERA insolvency route, or approves a buyer-driven takeover by a new promoter. Recovery in this pattern is slow (2 to 4 years) and partial (50 to 80 paise on the rupee is typical), but the RERA framework is what gets you into the recovery queue at all. Without it, you are a general creditor in insolvency, which means you get less and later.

The first written notice: a template

The single most under-utilised document in possession-delay disputes is a cleanly drafted first notice. A good notice does three things: it tells the builder you know your Section 18 rights, it sets a 30-day clock running, and it creates the paper trail that every subsequent step will rely on. Use this as a starting point; customise the factual blocks in square brackets.

Frequently asked questions