Builder Missed Your Possession Date? How Delay Interest Works Under RERA Section 18

You can exit with a full refund plus interest, or stay and get interest for every month of delay. In Maharashtra the rate is SBI's highest MCLR plus 2%.

Delayed possession is the most common complaint we hear from buyers of new flats. Section 18 of the Real Estate (Regulation and Development) Act gives you two choices.

Your two options

Exit: withdraw from the project and get your money back with interest, from the date of each payment to the date of refund. Compensation is decided separately by the adjudicating officer.
Stay: keep the flat and receive interest for every month of delay, from the promised possession date until possession or occupancy certificate.

Staying in the project does not mean giving up your claim. You are owed interest for every month of delay.

The interest rate in Maharashtra

Under Rule 18 of the Maharashtra RERA Rules, the rate is SBI's highest marginal cost of lending rate (MCLR) plus 2% per year. It is simple interest, and the same rate the builder would charge you for late instalments.

How MahaRERA applies it

MahaRERA regularly orders builders to hand over flats and pay delay interest. A Free Press Journal report covers one such order against a Chembur developer.

Before you file

Find the possession date in your registered agreement, not the brochure.
Check whether MahaRERA has extended the project's completion date. See MahaRERA's extension and your possession date.
List every payment with its date. Interest is calculated from these.

Next steps: how to file a MahaRERA complaint and enforcing an order if the builder does not pay.

Frequently asked questions

What interest rate applies for delayed possession in Maharashtra?

SBI's highest MCLR plus 2% per year, simple interest, under Rule 18 of the Maharashtra RERA Rules.

Do I have to cancel my booking to get delay interest?

No. Under section 18 you can stay in the project and receive interest for every month of delay until possession.

Sources

This is general information, not legal or tax advice. Rules change, so check your own case with a lawyer or CA.

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Warmly,
Yanik

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