Builder delayed possession? How to file a RERA complaint for refund or delay interest

If a builder fails to hand over your flat by the date in the agreement, section 18 of the Real Estate (Regulation and Development) Act, 2016 gives you two choices. You can withdraw and get a refund of everything paid, with interest and compensation, or stay in the project and receive interest for every month of delay until possession. You file a complaint with your state RERA authority under section 31, usually online. Compensation claims go to the authority's adjudicating officer. The Supreme Court has held that a consumer commission complaint is also available. Where the builder is insolvent, homebuyers count as financial creditors under the Insolvency and Bankruptcy Code.

This guide is general information, not legal advice. The interest rate, fees and procedure are set by each state's RERA rules and regulations.

When RERA applies

• Projects that must register: under section 3, any real estate project where the land exceeds 500 square metres or the number of apartments exceeds eight, including phases, subject to the Act's exceptions. Projects ongoing on the date the Act came into force without a completion certificate also had to register.
• Check registration on your state RERA website by project name or registration number. The registration page shows the declared completion date, approvals, quarterly updates and any extensions granted.
• If a project that should have registered did not, the promoter faces penalties under the Act, and you can still complain to the authority.

Your rights in a delay

Many state rules fix the prescribed interest as the State Bank of India's highest marginal cost of lending rate plus 2%. Check your state's rules for the exact definition. The same rate usually applies to what the promoter can charge you for late payment, so the two sides are balanced.

Other protections that help when a project goes wrong:

• Section 13: the promoter cannot take more than 10% of the cost as an advance or application fee before a written agreement for sale is registered.
• Section 4(2)(l)(D): 70% of amounts realised from allottees must be kept in a separate account and used only for the project's land and construction cost.
• Section 14: the sanctioned plans cannot be altered without the consent required by the Act. Structural defects reported within five years of possession must be fixed by the promoter within 30 days at no charge.
• Section 19: you have the right to information on sanctioned plans and the stage-wise schedule, and to the documents on possession.

How to file a complaint

1. Collect documents: the allotment letter, registered agreement for sale, payment receipts and bank statements, the builder's correspondence on delays, and the RERA registration page.
2. Write to the builder first, stating the delay and your choice (refund or interest). A reply, or the lack of one, becomes evidence.
3. File online on the state RERA portal in the prescribed complaint form. Pay the fee, which varies by state. State the relief clearly: a refund with interest, or delay interest from the due date.
4. Attend hearings, which are often online. Many authorities run conciliation or mediation first.
5. Compensation: for loss beyond interest, apply to the adjudicating officer (sections 71 and 72).
6. Appeal: against an authority's order to the Real Estate Appellate Tribunal within 60 days (section 44), and then to the High Court (section 58).
7. Execution: if the builder does not pay, the authority can recover the amount as arrears of land revenue. Apply for execution.

Worked example: delay interest

Illustrative flat with a possession date of 31 March 2025, handed over on 30 September 2026, which is 18 months late. You paid ₹80,00,000 by the due date. The prescribed rate is an illustrative 10.5% a year.

• Interest for 18 months = ₹80,00,000 × 10.5% × 18 ÷ 12 = ₹12,60,000
• If payments were staggered, interest is computed from each payment date or from the possession due date, depending on the order. Authorities usually compute it on the amount paid as at each date.

If instead you withdraw after 18 months, the refund is ₹80 lakh plus interest from each payment date, which is often much more than the delay interest because earlier instalments carry interest for longer.

RERA, consumer commission or insolvency?

You generally cannot pursue the same relief in two forums at once. Choose based on the project's status and take advice on which gives the fastest enforceable order.

FAQ

Can the builder rely on force majeure for the delay?

The Act recognises force majeure such as war, flood, drought, fire, cyclone, earthquake or natural calamity. Authorities also granted pandemic extensions in 2020–21. Other reasons, such as finance problems or approvals delays within the builder's control, generally do not excuse delay.

Do I need a lawyer to file a RERA complaint?

No. You can file in person or through an authorised representative. A lawyer helps for complex claims or where the builder contests strongly.

Is delay interest taxable?

Interest received for delay may be treated as income. Some decisions treat compensation for delay differently. Ask a tax adviser how to report it.

I bought a resale flat in an under-construction project. Can I complain?

Generally yes, as the allottee stepping into the original allottee's shoes. Your agreement and the builder's endorsement of the transfer matter.

Sources

• Ministry of Housing and Urban Affairs — RERA Act and state authority links
• MahaRERA — complaints and project search in Maharashtra
• Karnataka RERA — complaints in Karnataka
• e-Jagriti — consumer commission filing
• Insolvency and Bankruptcy Board of India — homebuyers in insolvency proceedings
• See also the mistakes guide and GST on under-construction flats