How is interest for delayed possession calculated under RERA Section 18?

Question

My builder is more than two years late in handing over possession. How is the interest I am entitled to actually calculated under RERA? Before I spend money on it, I want to know whether Real Estate (Regulation and Development) Act 2016, Section 18 gives me a remedy here and what proof I would need. Any Section numbers I can quote when I write to them would be useful.

MyVakeel Legal Desk · Accepted Answer

Real Estate (Regulation and Development) Act 2016, Section 18, Real Estate (Regulation and Development) Rules, Rule 15/18 (state rules) and Real Estate (Regulation and Development) Act 2016, Section 71 is what decides this question in India. Read it alongside the provisions named, because the relief available to you turns on the facts you can prove on paper.

Section 18 entitles an allottee to a refund of the amount paid with interest, or to interest for every month of delay if the allottee chooses to continue with the project, when the promoter fails to complete or hand over possession by the date agreed in the agreement for sale.

Most state rules framed under RERA prescribe the applicable interest rate as the State Bank of India's highest marginal cost of lending rate plus two percent per annum, applied uniformly to both promoter's and allottee's default under a reciprocity principle.

Interest for delay is computed month-wise from the committed possession date until the date of actual offer of possession with a valid occupancy certificate, not merely a builder's informal intimation letter.

A complaint for interest under Section 18 can be filed before the Adjudicating Officer appointed under Section 71, who determines both the compensation and the interest payable after hearing both parties.

The interest liability accrues even if the allottee has not yet decided to withdraw from the project, since Section 18(2) separately grants monthly interest for delay as of right to allottees who wish to remain in the project.

What this means for you: 1) Calculate the delay period from the agreed possession date stated in the agreement for sale; 2) Obtain the current SBI MCLR rate applicable in your state's RERA rules to compute the interest; 3) File a complaint before the Adjudicating Officer under Section 71 seeking interest for delay; 4) Keep all payment receipts to establish the principal amount on which interest is claimed.

Where the facts are disputed, what usually decides a rera delay interest calculation matter is the paper trail — dated complaints, acknowledgments and written replies under Real Estate (Regulation and Development) Act 2016, Section 18. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in property law.