Delayed Flat in Mumbai: Refund or Monthly Interest Under RERA Section 18
Section 18 of the RERA Act gives buyers of a delayed flat two paths: withdraw and claim the amount paid with interest and compensation, or stay and receive interest for every month of delay. Here is what the Act says and how Mumbai buyers can choose.
Every delayed project in Mumbai produces the same conversation among buyers. One group wants out: return the money, with interest, and let them start again elsewhere. Another group has already sold the old flat, signed a loan and planned a school change, and simply wants the keys, with something for the wait. Both groups are asking the same law for different things.
That law is section 18 of the Real Estate (Regulation and Development) Act, 2016. Read with section 19, it sets out two clear paths for a buyer when the promoter cannot hand over possession on the date in the agreement for sale. This guide reads the text as published in the Gazette of India and explains what each path gives you, what it costs you, and what to gather before you choose.
The short answer. Under section 18(1) of the RERA Act, if the promoter fails to complete or give possession by the date in the agreement for sale, a buyer who wishes to withdraw can demand the return of the amount paid, with interest at the prescribed rate and compensation as provided under the Act. A buyer who does not wish to withdraw is to be paid interest for every month of delay until possession, at the prescribed rate. The trade-off: withdrawal returns your money and takes you out of the project, while staying keeps the flat but leaves your funds tied up in a project that is already late.
What does section 18 actually say?
The Gazette of India copy of the RERA Act, dated 26 March 2016, places section 18 under the heading "Return of amount and compensation". Section 18(1) applies if the promoter fails to complete, or is unable to give possession of, an apartment, plot or building in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified in it. It also applies where the failure is due to the promoter discontinuing business as a developer on account of suspension or revocation of registration, or for any other reason.
In that situation, the promoter is liable on demand, in case the allottee wishes to withdraw, to return the amount received with interest at the rate prescribed, including compensation in the manner provided under the Act. The section says this is without prejudice to any other remedy available.
The proviso covers the other path. Where an allottee does not intend to withdraw, the promoter shall pay interest for every month of delay, till the handing over of possession, at such rate as may be prescribed.
Section 19(4) mirrors the first path from the buyer's side. It says the allottee is entitled to claim a refund of the amount paid with interest at the prescribed rate, and compensation, if the promoter fails to comply or is unable to give possession in accordance with the agreement for sale.
Should you withdraw or stay in a delayed Mumbai project?
The Act gives you the choice. It does not make it for you. The table below sets the two paths side by side, using only what the Act says, so you can match them to your own situation.
| Point | Withdraw from the project | Stay in the project |
|---|---|---|
| Provision | Section 18(1) and section 19(4) | Proviso to section 18(1) |
| What you receive | Return of the amount paid, with interest and compensation | Interest for every month of delay |
| Interest rate | Rate as may be prescribed | Rate as may be prescribed |
| Until when | Payable on demand once you withdraw | Until possession is handed over |
| Your position | You exit the project | You stay, with possession still due |
A buyer with a home loan should think about the loan alongside the flat. If you withdraw, the refund has to be matched against what you owe your lender. If you stay, your EMIs or pre-EMIs continue while the delay interest accrues. Our guide to the MahaRERA payment schedule and the 10 percent rule covers how payments are meant to track the agreement in the first place.
The rate itself is not written into the Act. Both paths use the phrase "at such rate as may be prescribed", which means the rate is set under the rules that apply in the state. In Maharashtra, check the rate in the rules and orders published by MahaRERA before you calculate a claim.
Can the promoter push the deadline back?
A promoter facing delay may point to circumstances outside its control. The Act addresses this in section 6, which deals with extension of a project's registration, not with the date in your agreement. It says the Authority may extend the registration on an application by the promoter due to force majeure, and, in reasonable circumstances without default on the promoter's part, for reasons recorded in writing, for a period that in aggregate shall not exceed one year.
The Act defines force majeure narrowly for this purpose, as a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the project. If a promoter cites force majeure to explain a delay, ask which of these events it relies on and whether an extension was applied for and granted, and keep the answer on file with your other papers.
What other compensation does the Act provide?
Section 18 has two more sub-sections that matter to buyers. Section 18(2) says the promoter shall compensate allottees for any loss caused by defective title of the land on which the project is being developed or has been developed. It adds that a claim for compensation under that sub-section shall not be barred by limitation provided under any law for the time being in force.
Section 18(3) is broader. It says that if the promoter fails to discharge any other obligations under the Act, the rules or regulations, or the terms and conditions of the agreement for sale, the promoter is liable to pay compensation to the allottees in the manner provided under the Act.
Section 12 adds a separate route tied to marketing. Where a person makes an advance or deposit on the basis of information in a notice, advertisement, prospectus or model apartment, and sustains loss because of an incorrect or false statement in it, the promoter shall compensate that person. If the affected person intends to withdraw, the person is to be returned the entire investment with interest at the prescribed rate, and compensation.
What does the buyer owe in return?
Section 19 is a two way street. Section 19(6) says every allottee who has entered into an agreement for sale under section 13 shall make the necessary payments in the manner and within the time specified in the agreement, and pay a share of registration charges, municipal taxes, water and electricity charges, maintenance charges and ground rent. Section 19(7) says the allottee is liable to pay interest, at the prescribed rate, for delay in those payments.
Once the flat is ready, section 19(10) says every allottee shall take physical possession within two months of the occupancy certificate, and section 19(11) says every allottee shall participate in registering the conveyance deed under section 17.
The practical lesson is simple. Before you press a section 18 claim, check your own payment record against the agreement, because section 19(7) makes the allottee liable for interest on delayed payments too.
How should you build a section 18 claim?
A claim under section 18 turns on dates and amounts, so build the file before you send anything. Start with the possession date in your registered agreement for sale, not the date in a brochure or a sales email. Then list every payment with its date and receipt.
Next, decide which path you want, in writing. A letter to the promoter that says you wish to withdraw and demands the return of the amount paid triggers the first path. A letter that says you intend to stay and asks for monthly delay interest under the proviso triggers the second. Keep copies of both the letter and proof of delivery.
If the promoter does not respond, section 31 of the Act allows any aggrieved person to file a complaint with the Authority or the adjudicating officer. Our guide to verifying a MahaRERA project registration shows where to find the project's registration number, which any complaint will need.
Use this checklist before you act:
- Find the possession date in your registered agreement for sale.
- List every payment you have made, with dates and receipts.
- Confirm your own payments are up to date under section 19(6).
- Decide whether you want to withdraw or stay, and record the choice in writing.
- Check the prescribed interest rate under Maharashtra's rules before calculating.
- Work out the impact on your home loan for either path.
- Note the project's MahaRERA registration number for any complaint.
What do Mumbai buyers ask about section 18?
Can I get my money back if my Mumbai flat is delayed?
Yes. Section 18(1) of the RERA Act says that if the promoter fails to give possession by the date in the agreement for sale, the promoter is liable on demand to return the amount received, with interest at the prescribed rate and compensation, if the allottee wishes to withdraw from the project.
What if I want to keep the flat despite the delay?
The proviso to section 18(1) says that where an allottee does not intend to withdraw, the promoter shall pay interest for every month of delay, till the handing over of possession, at the prescribed rate. You keep your claim to the flat and receive interest for the period of delay.
What interest rate applies under section 18?
The Act does not fix a number. Both the refund path and the delay interest path use the words "at such rate as may be prescribed", so the rate comes from the rules that apply in the state. Mumbai buyers should check the current Maharashtra rules and MahaRERA orders before calculating a claim.
Is there a time limit for claims about defective land title?
Section 18(2) says the promoter shall compensate allottees for loss caused by defective title of the land, and that a claim for compensation under that sub-section shall not be barred by limitation provided under any law for the time being in force. Keep the title documents you received with your agreement.
Last updated 2026-10-18. PropNewz Team.
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