The agreement said December 2024. It is now well past that, the tower is still short of finishing, and the builder keeps offering a new date every quarter. For a Bengaluru buyer paying rent while also paying pre EMIs on a home that does not exist yet, the delay is not an inconvenience; it is a monthly bleed. What many buyers do not realise is that the law gives them a clear, enforceable choice in exactly this situation, and it does not depend on the builder's goodwill. Section 18 of the RERA Act sets out what you are entitled to when possession is late, and it is worth knowing before you accept yet another revised timeline.

The short answer. Under Section 18 of the Real Estate (Regulation and Development) Act, 2016, if the builder fails to hand over possession by the date in your registered agreement, you can either stay in the project and claim interest for every month of delay, or withdraw and claim a full refund of what you paid, with interest. The interest for delay is commonly set at the State Bank of India MCLR plus two percent per annum under the model rules, with the exact rate governed by the applicable RERA rules. So the agreed possession date in your registered agreement is the anchor for all your rights. The trade-off is between waiting with compensation and exiting with your money back, and which suits you depends on the project's real prospects and your own circumstances.

What does Section 18 actually give you?

It gives you an enforceable choice the moment the builder misses the agreed possession date. As Bajaj Finserv explains, when a builder fails to deliver by the agreed date the buyer can withdraw from the project and request a refund with interest compensation, or remain in the project and receive interest for the delay period until possession is handed over. The key is that this is your election, not the builder's; you decide whether to wait or to exit.

Because the right is triggered by the agreed date, that date matters enormously. The controlling timeframe is the possession date in the registered sale agreement, so a vague brochure promise is not what counts; the date written into your registered agreement is. Read that clause carefully before you sign, because it is the line from which every delay right is measured.

Should you take the refund or the interest?

That depends on whether you still want the home and whether the project is genuinely moving. If you withdraw, you can claim a refund of the amounts you paid along with interest, typically to be returned within a set number of days, which suits a buyer who has lost confidence in the project or needs the capital back. If you continue, you receive interest for the delay on what you have paid, accruing until possession, which suits a buyer who still wants the flat and expects it to be delivered, just late.

Be realistic about what each path costs in time. A refund claim ends your involvement but can itself take months to enforce and collect, especially from a builder already short of cash. Staying in for delay interest keeps you exposed to the project's fate but avoids the fight to extract money from a distressed developer. Weigh not just what you are entitled to on paper, but how readily you can actually realise it given the specific builder in front of you.

Neither choice is automatically right. A project that is nearly complete and simply slow may be worth staying in with delay interest, while one that has barely progressed and shows signs of distress may be a case for withdrawing and recovering your money. The table below frames the decision.

Whichever way you lean, you are exercising a legal right, not asking a favour, and that changes the tone of the conversation with the builder. Many buyers only discover this after months of politely accepting new dates, when a simple written reference to Section 18 would have shifted the balance far earlier. Knowing the right exists is often half of using it, because a builder behaves differently with a buyer who clearly understands what the law entitles them to claim.

How is the delay interest calculated?

The interest runs on the money you have paid, from the point the delay begins, at a rate the rules prescribe. Commonly the rate is expressed as the State Bank of India MCLR plus two percent per annum under the model rules, though some formulations state a fixed percentage, so confirm the exact rate under the applicable RERA rules for your state. The important structural point is that it is not a token gesture; it is a running rate on your actual payments, from the day after the promised possession date until possession is given, or until refund in a withdrawal.

It helps to see why the rate is set the way it is. Pegging delay interest to a bank benchmark plus a margin means the builder pays roughly what your money would have cost to borrow, and often more, which removes the incentive to sit on buyers' funds while stalling. For you, it converts an open ended wait into a compensated one, so a delay that would otherwise be pure loss at least earns a return in the meantime. That does not make waiting painless, but it does rebalance a relationship that used to tilt entirely toward the developer.

Karnataka's authority applies this framework, and orders in the state have directed builders to refund amounts with interest at MCLR plus two percent from the relevant date. Do not try to compute your entitlement to the last rupee yourself; instead, understand the shape of it, keep every payment receipt, and let the authority or your lawyer work the exact figure when you file.

Where do you enforce these rights?

You go to the state RERA authority, not the civil court. The complaint mechanism runs through the RERA authority or the adjudicating officer, and civil courts are barred from handling RERA matters, so the forum is specialised and, by design, faster than ordinary litigation. In Karnataka that means bringing your complaint before the state authority with your agreement, payment proofs, and the missed possession date.

We set out the procedure in our guide to how to file a RERA complaint in Karnataka. The practical advantage of this route is that it was built for exactly this dispute, so a well documented delay claim is often more straightforward to pursue than buyers fear, provided your paperwork is in order.

How does this connect to how you bought?

Your delay rights are only as strong as the registered agreement behind them, which is why the earlier steps matter. A registered agreement for sale with a clear possession date is the foundation of a Section 18 claim, and it ties back to the discipline we described in our guide to the RERA agreement for sale and the ten percent rule. If you paid large sums without a registered agreement fixing the date, you have weakened the very rights this section provides.

This is also a reason to buy into registered projects from builders with a delivery record. A registered project such as Godrej Parkshire at Hoskote sits squarely within the RERA framework, so the agreed timelines and your delay remedies are clearly anchored. RERA does not prevent delays, but buying within its framework is what makes the remedies available at all, and it is the single clearest reason to avoid unregistered projects that leave you with no statutory possession rights to fall back on.

What should a buyer facing a delay do?

Move methodically rather than accepting open ended postponements:

1. Find the possession date in your registered agreement and confirm it has actually passed.
2. Gather every payment receipt and the full agreement, since your claim is built on these.
3. Assess the project's real progress honestly to decide between continuing and withdrawing.
4. If you continue, claim interest for the delay from the day after the promised date until possession.
5. If you withdraw, claim a refund of amounts paid with interest, within the period the rules allow.
6. File your complaint with the state RERA authority, not a civil court, with full documentation.
7. Take legal advice to compute the exact interest and to present the claim cleanly.

Frequently asked questions

What are my rights if my builder delays possession?

Under Section 18 of the RERA Act, if the builder misses the possession date in your registered agreement, you can either continue in the project and claim interest for the delay until possession, or withdraw and claim a full refund of what you paid with interest. The choice is yours, and it is enforceable through the state RERA authority.

How much interest can I claim for a delay?

The interest is charged on the amounts you have paid, from the day after the promised possession date. It is commonly set at the State Bank of India MCLR plus two percent per annum under the model rules, though the exact rate depends on the applicable RERA rules. Keep your payment receipts so the exact figure can be computed.

Which date decides whether possession is delayed?

The controlling date is the possession date written into your registered sale agreement, not a brochure promise or a verbal assurance. Delay rights under Section 18 are measured from that agreed date, which is why you should read the possession clause carefully before signing and ensure the agreement is registered.

Where do I file a delayed possession complaint in Karnataka?

You file with the Karnataka RERA authority or the adjudicating officer, because civil courts cannot hear RERA matters. Bring your registered agreement, payment receipts, and the missed possession date. The RERA route is designed for exactly this dispute, so a well documented delay claim is usually more direct than ordinary litigation.

Last updated 2026-07-23. PropNewz Team.