Delayed Flat in Chennai? Section 18 Gives You Two Choices: Withdraw or Wait
Section 18(1) of the RERA Act gives buyers in a delayed project a choice: withdraw and get the amount paid back with prescribed interest and compensation, or stay and receive interest for every month of delay until possession. This guide explains both remedies, the Section 2(za) interest rule, extensions under Section 6, and where Chennai buyers file.
The agreement for a two-bedroom flat off a Chennai arterial road said possession in December. December came with a builder email about labour and approvals. March brought a new date. By the following monsoon, the family was paying rent and a home loan EMI at the same time, and asking the question every delayed buyer eventually asks: should we walk away with our money, or wait for the keys and get paid for the delay?
The Real Estate (Regulation and Development) Act, 2016 answers that question in one section. Section 18 gives a buyer in a delayed project a choice between two remedies. This guide explains both, the interest rule that sits behind them, how the declared completion date and extensions fit in, and the steps a Chennai buyer can take to decide.
The short answer. Section 18(1) says that if the promoter fails to complete or is unable to give possession in accordance with the agreement for sale, or by the date specified in it, the promoter is liable on demand to return the amount received with interest at the prescribed rate, including compensation, if the allottee wishes to withdraw. If the allottee does not intend to withdraw, the proviso says the allottee shall be paid interest for every month of delay till the handing over of possession. The trade-off: withdrawal returns your money with interest but ends your claim to that flat; staying keeps the flat but leaves you waiting, with monthly interest as the remedy for the delay.
What does Section 18 say about a delayed flat?
It sets out two triggers and two remedies. In the text of the Act as published by the Telangana regulator, Section 18(1) applies where 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 therein; or due to discontinuance of his business as a developer on account of suspension or revocation of the registration under the Act or for any other reason.
In that situation, the promoter shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received in respect of that apartment with interest at such rate as may be prescribed, including compensation in the manner provided under the Act.
The proviso covers the buyer who stays. Where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.
Withdraw or wait: how do the two options compare?
Both remedies are in the same subsection, and the choice belongs to the allottee. The phrases in case the allottee wishes to withdraw and where an allottee does not intend to withdraw make that clear in the text.
| Point of comparison | Withdraw from the project | Stay in the project |
|---|---|---|
| What the promoter pays | The amount received for the flat, with interest at the prescribed rate | Interest for every month of delay |
| Until when | Interest runs till the amount and interest are refunded, per Section 2(za) | Till the handing over of possession |
| Compensation | Included, in the manner provided under the Act | Not named in the proviso itself |
| What you keep | Your money back, with no claim to the flat | Your claim to the flat |
| Main risk | Re-entering the market at a later date and price | Further delay while you wait for possession |
Section 19(4) mirrors the refund route from the buyer's side. It says the allottee shall be entitled to claim the refund of amount paid along with interest at the prescribed rate and compensation, if the promoter fails to comply or is unable to give possession in accordance with the terms of the agreement for sale, or due to discontinuance of business on account of suspension or revocation of registration.
How is the interest worked out?
From each payment, at a rate set by the state rules. Section 18 uses the words at such rate as may be prescribed, so the actual percentage comes from the rules in force in the state, which buyers in Chennai should confirm with the Tamil Nadu regulator.
The period is fixed by the Act. Section 2(za) explains that the interest payable by the promoter to the allottee shall be from the date the promoter received the amount or any part thereof till the date the amount or part thereof and interest thereon is refunded. The same clause says the rate chargeable from the allottee by the promoter in case of default shall be equal to the rate the promoter shall be liable to pay the allottee in case of default.
In practice that means each instalment earns interest from its own date. A booking amount paid three years ago carries interest for three years; a slab payment made last year carries interest for one. Our earlier guide on calculating RERA refund interest payment by payment works through this in detail, and the same method applies to a Chennai claim.
Which date counts as the possession date?
Section 18(1)(a) refers to the terms of the agreement for sale and the date specified therein. That makes the agreement the first document to read. Section 13(2) says the agreement must specify the date on which possession is to be handed over.
There is a second date in the registration file. Section 4(2)(l)(C) requires a declaration, supported by an affidavit and signed by the promoter, stating the time period within which he undertakes to complete the project or phase. Buyers often find that this declared completion date differs from the agreement date. Keep both, since the agreement date is the one Section 18(1)(a) names.
Registration can also be extended. Section 6 says the registration may be extended by the Authority on an application made by the promoter due to force majeure, and its explanation defines force majeure as war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the project. The first proviso allows the Authority, in reasonable circumstances without default on the part of the promoter, to extend registration for such time as it considers necessary, which shall in aggregate not exceed one year. For the Tamil Nadu angle on extensions, see our earlier report on TNRERA's four-month completion date extension.
Where does a Chennai buyer file the claim?
With the Authority or the adjudicating officer. Section 31(1) says any aggrieved person may file a complaint with the Authority or the adjudicating officer for any violation or contravention of the Act, rules or regulations against any promoter, allottee or real estate agent, and its explanation says person includes the association of allottees or any registered voluntary consumer association.
Compensation has its own forum. Section 71(1) says that for adjudging compensation under sections 12, 14, 18 and 19, the Authority shall appoint an adjudicating officer who is or has been a District Judge. Section 72 lists the factors the officer weighs, including the amount of disproportionate gain or unfair advantage, the loss caused and the repetitive nature of the default.
A group of delayed buyers in one project can also act together. The explanation to Section 31(1) counts an association of allottees as a person who can complain, which can matter when the delay affects a whole tower.
How should you decide between refund and interest?
Start with facts you control. How much have you paid, and when? What does the agreement say about the possession date? Is the project registration still valid, or has it been extended, suspended or revoked? Section 18(1)(b) separately covers discontinuance of business on account of suspension or revocation of registration, which changes the picture for a buyer who is waiting.
Then weigh your own position. A buyer paying both rent and an EMI may value a refund with interest more than monthly interest on a flat that is still months away. A buyer who wants that specific flat may prefer to stay and receive interest for every month of delay. The Act gives the choice to the allottee; it does not tell you which to pick, and this guide does not either.
- Find the possession date in your agreement for sale, since Section 18(1)(a) uses the date specified there.
- Note the completion date declared in the project's registration under Section 4(2)(l)(C) and any extension granted under Section 6.
- List every payment with its date and receipt, because Section 2(za) runs interest from the date the promoter received each amount.
- Check the interest rate prescribed under the Tamil Nadu rules for refunds and delay interest.
- Decide whether you wish to withdraw or stay, the choice Section 18(1) and its proviso leave to the allottee.
- Write to the promoter with your demand, since Section 18(1) makes the promoter liable on demand.
- If unresolved, file a complaint under Section 31(1), alone or through the association of allottees, and seek compensation under Section 71.
Frequently asked questions
Can I get a full refund if my Chennai flat is delayed?
Section 18(1) of the RERA Act says if the promoter fails to give possession as per the agreement or by the date specified in it, the promoter is liable on demand, if the allottee wishes to withdraw, to return the amount received with interest at the prescribed rate, including compensation in the manner provided under the Act.
What do I get if I stay in a delayed project?
The proviso to Section 18(1) says where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay till the handing over of possession, at the rate prescribed under the rules. Withdrawal is not required to claim this delay interest.
From when is RERA refund interest calculated?
Section 2(za) of the RERA Act says interest payable by the promoter to the allottee runs from the date the promoter received the amount or any part of it till the date that amount and interest on it is refunded. It also says the default rate charged to the allottee must equal the rate the promoter pays.
Can the builder extend the completion date?
Section 6 lets the Authority extend registration on the promoter's application due to force majeure, defined as war, flood, drought, fire, cyclone, earthquake or other natural calamity. Its proviso allows extension in reasonable circumstances without promoter default, not exceeding one year in aggregate, for reasons recorded in writing.
A delay turns a home purchase into a decision about money and time. Read the agreement, gather the receipts, and make the Section 18 choice with the numbers in front of you. This is general buyer information, not legal advice.
Last updated 2026-10-27. PropNewz Team.
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