What Section 18 of RERA Says
Section 18 of the Real Estate (Regulation and Development) Act, 2016 is the buyer's most powerful remedy for possession delay. It provides two alternative reliefs — and critically, it is a right, not a discretionary award. The authority does not have the power to deny it if the delay is proven.
The two alternatives under Section 18(1) are:
- Section 18(1)(a) — Withdraw from the project: The buyer can exit and claim full refund of all amounts paid, plus interest at the prescribed rate from the date of each payment until actual refund. This is the nuclear option — use when you have lost faith in the project's completion.
- Section 18(1)(b) — Continue in the project: The buyer can choose to stay invested and receive monthly interest at the prescribed rate for every month of delay until possession is actually handed over with OC. The interest continues to accrue until the day you receive actual possession — not the day the builder notifies you of readiness.
The Prescribed Interest Rate
The RERA (General) Rules 2016 prescribe the interest rate as the SBI Marginal Cost of Lending Rate (MCLR) + 2%. As of 2026, SBI's 1-year MCLR is approximately 8.5%, making the applicable interest rate approximately 10.5% per annum (or ~0.875% per month). This rate applies on all amounts paid by the buyer — booking amount, down payment, construction-linked installments — from their respective payment dates.
How to Calculate Your Claim: Worked Example
Suppose you paid ₹60 lakh in total across various installments, and the RERA-registered possession date was 2 years ago (24-month delay):
- Principal paid: ₹60,00,000
- Interest rate: 10.5% per annum
- Delay period: 24 months (2 years)
- Annual interest: ₹60,00,000 × 10.5% = ₹6,30,000
- Total for 2 years: ₹6,30,000 × 2 = ₹12,60,000
Note: If payments were made at different times (not all upfront), calculate interest from each payment date separately. The total claim will vary based on the payment schedule in your BBA.
When Does the Delay Clock Start?
The clock starts from the original RERA-registered possession date — not the developer's internally revised date, not the date mentioned in a letter the developer sent you, and not any "extended" date the developer unilaterally declared. If the developer filed for a RERA extension and the authority approved it, the new date applies from that approval date. Otherwise, the original date controls.
Important: Most developers send letters claiming force majeure or Covid-related extensions. These letters do not automatically extend your RERA possession date. Only a formal RERA order can do that.
Force Majeure and Covid: What the Supreme Court Said
In Newtech Promoters and Developers v. State of UP (2021), the Supreme Court held that force majeure claims by real estate developers are to be construed very narrowly. Developers cannot use generic supply chain issues, labour shortages, or funding problems as force majeure defenses. The Court accepted only a very limited Covid-related window (approximately March 2020 to September 2020) as a valid basis for extension, and only if the developer specifically proved direct impact on the specific project.
Post-2021, RERA authorities are significantly less receptive to force majeure defenses, and buyers can successfully argue for interest covering the full delay period.
How to File Your Section 18 Claim
File a complaint on your state RERA portal citing Section 18 and specifying the relief you want (18(1)(a) or 18(1)(b)). Attach your payment receipts, BBA, and an interest calculation sheet. For a complete filing walkthrough, see our step-by-step RERA complaint guide.
State-Wise Possession Delay Resources
For state-specific possession delay guides including which RERA portal to use, typical timelines, and recent orders in your state, see our possession delay claim hub.
After the Order: Execution
If the developer does not comply with the RERA order, file an Execution Petition. Under Section 40, the RERA authority can treat the order as an arrear of land revenue and direct the district collector to recover the amount. This is a powerful tool — collectors can attach movable and immovable assets of the developer to satisfy the order.
FAQ
Can I claim Section 18 interest even if I have taken possession?
Yes, but carefully. You can claim interest for the delay period even if you have subsequently taken possession — provided you did not sign a "No Dues" or "Full and Final Settlement" letter at possession. If you signed such a document, it may be used against you in RERA proceedings.
Is Section 18 interest taxable?
The Income Tax Department's position is that RERA Section 18 interest received is taxable as income from other sources. Consult your CA for the tax treatment in your specific case.
What if the developer has already sold the project to another developer?
RERA Section 15 requires prior consent of 2/3rd allottees and RERA authority approval for transfer of a registered project. The new promoter steps into the original promoter's shoes — all liabilities including Section 18 interest run against the new promoter. For more on RERA fundamentals, read our RERA explained guide.