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? I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

How is interest for delayed possession calculated under RERA Section 18? is governed in India primarily by 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. The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact 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 to do next: 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.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under Real Estate (Regulation and Development) Act 2016, Section 18 carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. 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 this practice area.