Possession Delay Compensation
Under Section 18 of the RERA Act 2016, a buyer is entitled to monetary compensation when a builder fails to hand over possession by the date promised in the registered agreement for sale. The buyer can either accept interest at SBI MCLR plus 2 percent on the amount paid for every month of delay, or withdraw from the project and demand a full refund with the same interest.
What is Possession Delay Compensation?
Possession Delay Compensation is the statutory remedy available to a home buyer when the promoter fails to deliver possession of the apartment, plot, or building by the date committed in the registered Agreement for Sale. It is codified in Section 18 of the Real Estate (Regulation and Development) Act, 2016, and is non-waivable — a clause in the builder’s agreement that says ‘‘the buyer waives all claims under Section 18’’ is unenforceable in any RERA Adjudicating Authority.
The buyer has two mutually exclusive choices the moment the promised date is missed:
- Stay in the project and claim monthly interest on every rupee already paid, from the date possession was promised until possession is actually offered with a valid Occupancy Certificate.
- Withdraw from the project and demand a full refund of the amount paid, along with interest for the entire holding period.
Why it matters for property buyers
Under-construction projects regularly slip 12 to 36 months past their RERA-declared completion date. Without the Section 18 remedy a buyer would be locked in indefinitely, paying EMIs on a home they cannot occupy and rent on a home they already live in — a double cost that India’s consumer forums called the ‘‘home buyer trap’’ before RERA was enacted.
The interest rate prescribed under RERA Rules in most states is SBI’s prevailing Marginal Cost of Funds-based Lending Rate (MCLR) plus 2 percent. On a 1 crore investment with 80 lakh already paid, a 12-month delay at roughly 10.5 percent translates to about 8.4 lakh of compensation — material enough that builders settle most disputes once a formal RERA complaint is filed.
How to verify or calculate it
- Find the promised possession date in your registered Agreement for Sale (not the brochure date, not the RERA portal date — the agreement is what binds).
- Confirm the project has no Occupancy Certificate issued by the local municipal authority by the promised date.
- Pull the SBI MCLR rate for the relevant month from sbi.co.in and add 2 percent.
- Calculate:
(Total amount paid) × (MCLR + 2 percent) × (months of delay ÷ 12). - Send a written demand to the promoter quoting Section 18; keep the postal/email proof.
- If the promoter does not pay or refund within 30 to 45 days, file a complaint with your state RERA Adjudicating Officer (online portal in every state) — fee is typically 1,000 to 5,000 rupees.
- Keep digital copies of all payment receipts, the registered agreement, the RERA registration extract, and any communication with the promoter.
How Brickplot uses Possession Delay Compensation in its score
Possession-delay exposure feeds two axes. The RERA Disclosure Quality (10 percent) axis is downgraded when a project’s registered completion date has already been revised more than once on the state RERA portal — a leading indicator of more revisions to come. The Construction & Delivery Risk (9 percent) axis is the direct measure: a project that has slipped more than 18 months past its original RERA date triggers the ‘‘Construction stalled greater than 18 months’’ hard cap, capping the final Brickplot score at 4.4 and flipping the verdict to Avoid. The Quarterly Progress Report (QPR) scraped weekly from each state RERA portal is the data source — we track the gap between actual percent-complete and the percent-complete the promoter committed to in the most recent QPR.
Related terms: RERA Registration, RERA Complaint, Occupancy Certificate
Related terms
Brickplot verifies possession delay compensation disclosures on every reviewed project as part of the independent 11-axis score. No builder commissions. No editorial override.