Interest Is Not Compensation: How a Mumbai Buyer's RERA Claim Is Actually Measured and Recovered

A family in Mulund paid most of the price for a two-bedroom flat in 2022 and is still waiting for keys. They have read that RERA gives them interest for every month of delay. They have also read about buyers winning compensation for stress, rent and lost opportunities. When they sit down to draft a complaint, the two ideas blur together. They should not. Under the Real Estate (Regulation and Development) Act, 2016, interest and compensation are different claims, weighed differently, and a buyer who mixes them up can ask for the wrong thing or prove the wrong facts.

This guide uses MoHUA's official FAQ on the Act to set out how a Mumbai buyer's claim is measured, who measures it, how long the process is meant to take and what happens when a builder does not pay.

The short answer. Under Section 18, a delayed buyer can withdraw with a full refund plus interest and compensation, or stay and receive interest for every month of delay, plus compensation in certain circumstances. Compensation disputes under Sections 12, 14, 18 and 19 go to an Adjudicating Officer, who is or has been a District Judge and must weigh four factors: disproportionate gain, loss, repetitive default and other factors in the interest of justice. The trade-off: interest follows a formula, while compensation depends on what you can prove, so a stronger file takes more effort but can be worth more.

What is the difference between RERA interest and RERA compensation?

MoHUA's Frequently Asked Questions on the Real Estate (Regulation and Development) Act, 2016 describes Section 18 as covering situations in which the promoter fails to hand over possession. The allottee then has the right to withdraw and claim a full refund along with interest and compensation. Alternatively, if the allottee stays, the allottee is entitled to interest for every month of delay until possession, and to compensation in certain circumstances.

Interest is the formula part. The FAQ explains that under the Explanation to Section 2(za), the rate of interest payable by the promoter or the allottee is the same, and the rate is to be specified by the appropriate Government in its Rules. In other words, the builder pays you at the same rate you would pay the builder for a late instalment.

A simple illustration shows the scale. Suppose a buyer has paid Rs 90 lakh and possession is 12 months late. If the rate prescribed under the state's rules worked out to 10 percent a year, simple interest for that year would be about Rs 9 lakh. The 10 percent figure here is only for illustration; the actual rate is the one in Maharashtra's rules, and the period runs according to your agreement and the order passed. The point is that interest is arithmetic once the rate, amount and period are fixed, which is why it is the more predictable part of any claim.

Compensation is the judgement part. It is meant to address loss and unfair gain that a fixed interest rate does not capture, and it is decided on evidence.

Who decides compensation, and on what basis?

The FAQ describes the Adjudicating Officer as a quasi-judicial person mandated to adjudicate disputes arising under Sections 12, 14, 18 and 19, and states that the officer shall be a person who is or has been a District Judge.

It then lists what the officer must weigh. While deciding disputes under those four sections, the Adjudicating Officer shall have regard to the amount of disproportionate gain or unfair advantage, the amount of loss, the repetitive nature of the default, and such other factors as the officer considers necessary in furtherance of justice.

Read those four factors as a checklist for your evidence. Disproportionate gain points to what the builder earned by using your money. Loss points to what you actually lost, such as rent paid while waiting. Repetitive default points to a pattern, for instance missed dates across several towers or projects. The fourth factor leaves room for anything else that justice requires.

Which sections can lead to a compensation claim?

The FAQ names four. The table summarises what each section covers, as described in the FAQ, and the kind of evidence a Mumbai buyer would typically assemble for each.

Section 14 deserves a note. The FAQ explains that minor additions or alterations can be made after approval and disclosure, but major modifications need approval from two-thirds of the allottees, with the promoter's own apartments excluded from the count and each allottee entitled to one vote irrespective of the number of apartments held.

How long should a RERA complaint take?

The FAQ states that Section 31 allows an aggrieved person to file a complaint with the Regulatory Authority or the Adjudicating Officer, as the case may be, with the form, manner and fee set by Rules. On timing, it says Section 29 provides that the Authority should endeavour to dispose of complaints as expeditiously as possible but not later than sixty days from filing, and where it cannot, it is required to record its reasons.

The wording is an endeavour with a duty to record reasons. Buyers should plan for the possibility that a contested case, especially one involving compensation and evidence, takes longer. Our earlier piece comparing RERA, consumer commissions and civil courts for Mumbai buyers covers the choice of forum before you file.

What happens if the builder does not pay after an order?

The FAQ is direct on this. If a promoter, allottee or real estate agent fails to pay any interest, penalty or compensation imposed by the Adjudicating Officer, the Regulatory Authority or the Appellate Authority, the amount becomes recoverable as an arrear of land revenue. Orders and directions that are not followed can be enforced through prescribed legal procedures.

In Maharashtra, MahaRERA released a standard operating procedure on recovering compensation, which the Free Press Journal reported on November 22, 2025. As described in that report, the SOP moves through a compliance window after the order, a non-compliance application by the buyer, a hearing, an affidavit of the developer's assets, a recovery warrant to the District Collector and, if needed, escalation to the Principal Civil Court. Read the circular itself on MahaRERA's website for the exact timelines before you act on any of them.

How should a Mumbai buyer build a stronger claim?

Start from the four factors and work backwards. Whether you bought in a large project such as The Prestige Place in Kanjurmarg and Mulund or a smaller society redevelopment, the method is the same. If your project's completion date has recently moved, also read our guide to MahaRERA's four-month force majeure extension before you draft.

1. Separate your claim into interest, which follows the prescribed rate, and compensation, which needs proof.
2. Identify the section involved: 12, 14, 18 or 19, and match your facts to what that section covers.
3. Collect proof of loss, such as rent agreements and receipts for the months you waited.
4. Note any sign of disproportionate gain, such as payments collected far ahead of construction.
5. Look for a pattern of repeated default across towers or projects by the same promoter.
6. File in the form and with the fee set by Maharashtra's rules, and keep the acknowledgement.
7. If an order goes unpaid, use the recovery route and read MahaRERA's SOP for the exact steps.

Is it worth claiming compensation, or should a buyer settle for interest?

That depends on the evidence and on your appetite for a longer process. Interest is comparatively predictable because the rate is set by rules and applies to the money you paid. Compensation can address losses interest does not, but it asks you to prove them against the four factors. A practical approach is to build a clear interest claim first and add compensation only for losses you can document. Either way, the sooner you start keeping records, the stronger your file.

Frequently asked questions

Who decides compensation in a RERA dispute?

MoHUA's RERA FAQ says the Adjudicating Officer is a quasi-judicial person mandated to adjudicate disputes arising under Sections 12, 14, 18 and 19, and that the Adjudicating Officer shall be a person who is or has been a District Judge. Those sections cover advertisements, plan changes and defects, delay or failure to deliver, and allottee rights.

What factors decide how much compensation a buyer gets?

According to MoHUA's FAQ, while deciding disputes under Sections 12, 14, 18 and 19, the Adjudicating Officer shall have regard to the amount of disproportionate gain or unfair advantage, the amount of loss, the repetitive nature of the default, and such other factors as the officer considers necessary in furtherance of justice.

How quickly must RERA decide a complaint?

MoHUA's FAQ says Section 29 provides that the Authority should endeavour to dispose of complaints as expeditiously as possible but not later than sixty days from filing, and where it cannot, it is required to record its reasons. In practice, plan for the possibility that a contested case takes longer than sixty days.

What happens if the builder does not pay what RERA ordered?

MoHUA's FAQ says that if a promoter, allottee or agent fails to pay interest, penalty or compensation imposed by the Adjudicating Officer, the Authority or the Appellate Authority, the amount becomes recoverable as an arrear of land revenue, and orders not followed can be enforced through prescribed legal procedures.

Last updated 2026-11-13. PropNewz Team.