Two years after the date his builder had promised possession, a Bengaluru buyer was still paying rent on one home and instalments on another that did not exist yet. The project had slipped, the sales office offered only vague new timelines, and he assumed his only choice was to keep waiting and hope. What he had not been told was that the law gave him a clear right from the moment the promised date passed, either to walk away with his money back and interest on top, or to stay and be paid interest for every month the builder ran late. His position was far stronger than the sales office had let on. The delay was the builder's breach, and the law had already decided what he was owed for it.

The short answer. If a builder fails to hand over possession by the date agreed in the agreement for sale, Section 18 of the Real Estate Act gives you two choices. You can withdraw from the project and recover the full amount you have paid, along with interest, or you can stay in the project and claim interest for every month of delay until possession is given. The right to that interest is statutory, arising the moment the agreed date passes, and it is claimed by filing a complaint with the state authority. Taking possession later does not waive your claim for the delay already suffered. The trade off is between exiting with your money and interest, or continuing and being compensated for the wait.

What does Section 18 give a buyer on delay?

Section 18 gives a buyer a right to be made whole when a builder misses the agreed possession date, and it does so without leaving it to the builder's goodwill. Under the provision, if the promoter fails to complete or is unable to give possession of the apartment by the date specified in the agreement for sale, the allottee gains a choice. They may withdraw from the project, in which case the promoter has to return the amount received from them together with interest, or they may choose to remain in the project, in which case they are entitled to interest for every month of delay until possession is handed over. The key feature is that this is a statutory entitlement rather than a favour, so it does not depend on the agreement containing a generous clause or on the builder agreeing to pay. It is triggered by a simple fact, the passing of the agreed date without possession. For a buyer this changes the conversation with a delaying builder, because the question is no longer whether compensation is owed but which of the two remedies to pursue.

Refund or continue: which option, and when?

The choice between withdrawing and continuing depends on whether you still want the flat, and both routes carry interest. If you no longer wish to wait, you can withdraw and require the builder to refund the entire amount you have paid, with interest on it, which puts you back in funds and frees you to buy elsewhere. If you still want the flat and believe it will be delivered, you can stay in the project and claim interest for each month of delay, so that the builder pays for the time you are kept waiting while you remain a buyer. Neither option is a penalty you have to argue for from scratch, because both flow from the same section. The decision is practical. Withdrawal suits a buyer who has lost confidence in the project or needs the money back, while continuing suits one who wants the home and would rather be compensated for the delay than start over. What you should not do is treat the delay as simply bad luck to be absorbed, because the law has given you a specific remedy either way.

What are the two options and how do they work?

The table below sets out the two remedies under Section 18 and how each one operates.

Reading across, the two options differ in outcome but share the same foundation, a statutory right to interest that begins when the agreed date is missed. The rate is the one prescribed under the rules, applied even handedly, which is the same rate a buyer would face for paying late, so the compensation is symmetric rather than token. And in both cases the remedy is pursued through the state authority rather than left to negotiation with the builder. Knowing the shape of the two options is what lets a buyer choose deliberately instead of drifting through an open ended delay.

How is the delay interest worked out?

The delay interest is calculated at the rate prescribed under the rules, applied to the amount you have paid, for the period of the delay. The rules set a benchmark rate for this purpose, commonly linked to the State Bank of India's benchmark lending rate with a margin added, and the same rate applies whether it is the builder compensating you for delay or you paying the builder for a late instalment, which is what makes it fair. For the continuing option, the interest runs for each month from the agreed possession date until possession is actually given, on the total amount you have paid towards the flat. For the withdrawal option, the refund of your money carries interest as well, so you are not simply handed back the principal after a long wait. The exact figure depends on the prescribed rate at the time and the amount and period involved, so it is worth having the numbers computed for your own case, but the principle is settled. The delay has a price, it is set by the rules rather than by the builder, and it accrues from the date you were promised the home.

Does taking possession waive my delay claim?

No, taking possession when the flat is finally ready does not waive your right to claim compensation for the delay that has already happened. This is an important and often misunderstood point, because buyers worry that accepting the keys signals they are satisfied and gives up their claim. Under the law the two are separate. Accepting possession of the completed flat and claiming interest for the months it was delivered late are not mutually exclusive, so you can move into your home and still pursue the compensation for the period you were kept waiting. This matters because a builder may offer possession precisely to imply that the matter is closed, when the delay that occurred before it remains a live claim. The practical takeaway is to keep a clear record of the agreed possession date and the actual date of handover, and to understand that moving in does not erase the gap between them. The claim for delay is about the past period of waiting, and it survives the moment you take the keys.

What should I do if possession is delayed?

Work through these steps if a project runs past its promised date.

1. Find the agreed possession date in your registered agreement for sale.
2. Record the actual position on site and the absence of possession past that date.
3. Decide whether you want to withdraw for a refund or continue and claim interest.
4. Have the interest for the delay computed on the amount you have paid.
5. Raise your claim with the builder in writing, referring to your Section 18 rights.
6. File a complaint with the state real estate authority if the builder does not respond.
7. Remember that taking possession later does not waive the claim for past delay.

How does this fit the agreement and refund?

Your delay rights rest directly on the possession date, which is why the agreement for sale matters so much. The clearly stated date we urge buyers to check in our guide to the RERA agreement for sale is the very date against which a delay under Section 18 is measured, and the withdrawal remedy connects to the refund principles we cover in our explainer on the booking amount, token advance and RERA refund. For a flat in an under construction project such as Prestige Avon on Thanisandra Main Road, the possession date in the agreement is what turns a delay into an enforceable claim. The agreement, the delay remedy and the refund are parts of the same framework, and the possession date is the thread that runs through all three.

Frequently asked questions

What are my rights if my builder delays possession? Under Section 18 of the Real Estate Act you can either withdraw and recover the full amount paid with interest, or stay in the project and claim interest for every month of delay until possession. The right arises the moment the agreed possession date passes, and it is claimed by filing a complaint with the state authority.

How is delay interest calculated under RERA? At the rate prescribed under the rules, applied to the amount you have paid, for the period of the delay. The prescribed rate is commonly linked to the State Bank of India's benchmark lending rate with a margin, and the same rate applies to both sides. For a continuing buyer it runs from the agreed date until possession.

If I take possession late, do I lose my delay compensation? No. Taking possession of the completed flat and claiming interest for the period it was delivered late are separate and not mutually exclusive under the law. You can move in and still pursue compensation for the months of delay that already occurred. Keep a record of the agreed and actual handover dates.

How do I claim compensation for a delayed project? Raise the claim with the builder in writing, referring to your Section 18 rights, and if it is not resolved, file a complaint with the state real estate authority. Have the delay interest computed on the amount you have paid, from the agreed possession date. The right to interest is statutory.

Last updated 2026-08-31. PropNewz Team.