The possession date in Anil's agreement said December 2023. By the time the second monsoon passed with the tower still wrapped in scaffolding near Sarjapur Road, he had stopped believing the site manager's new dates. What he did not know was that the law had already given him a specific, enforceable choice the moment the builder missed that agreed date. Section 18 of the Real Estate Regulation and Development Act is the provision that turns a broken possession promise into money the buyer can actually recover, and understanding it is the difference between waiting helplessly and acting from a position of right.

The short answer. When a builder fails to hand over possession by the date written in your agreement, Section 18 gives you two rights: withdraw and get a full refund of what you paid with interest, or stay in the project and claim interest for every month of delay until you actually get possession. In Karnataka the interest rate is set by the state RERA rules at the State Bank of India's highest marginal cost of lending rate plus two percent. The trade off is real: withdrawing gets your capital back with interest but ends your claim on the flat, while continuing keeps the home and compounds delay interest but ties your money up longer.

What does Section 18 actually give a buyer?

Section 18 gives you a legal remedy that does not depend on the builder's goodwill. If the promoter fails to complete the project or is unable to give possession by the date specified in the agreement for sale, you are entitled either to withdraw with a full refund and interest, or to remain and receive interest for the period of delay. Crucially, this right is triggered by the missed agreement date, not by any revised timeline the builder announces later. That is why the possession date in your registered agreement is one of the most important lines in the whole document, and why a vague or open ended possession clause should worry you before you sign.

Should you withdraw or continue?

This is the central decision, and it depends on your circumstances rather than a single right answer. Withdrawing suits a buyer who has lost confidence in the project or needs the capital back, because it returns the full amount paid together with interest from the dates you paid. Continuing suits a buyer who still wants the home and believes it will be delivered, because it lets you keep the flat while the builder pays interest for every month of delay until handover. Many buyers choose to continue and claim delay interest, since Bengaluru homes are hard to replace at the same price, but the option to exit with your money and interest is a powerful lever precisely because the builder wants to avoid it.

It is also worth being honest with yourself about the project's real trajectory. If the site has active labour, cleared approvals, and visible progress, continuing and claiming delay interest is often the pragmatic path. If work has stalled, approvals are missing, or the promoter is facing multiple complaints, the refund route protects your capital from being locked in a project that may never finish. The right choice is the one that matches the ground reality of your specific tower, not the average of what other buyers decide, so a site visit and a look at the promoter's other projects are worth as much as the legal text here.

How is the delay interest calculated?

The rate is not left to the builder or to negotiation. Under the Karnataka RERA rules, the interest payable by a promoter to an allottee is the State Bank of India's highest marginal cost of lending rate plus two percent. For a buyer who continues in the project, that interest runs for every month from the agreed possession date until actual handover, calculated on the amount you have paid. For a buyer who withdraws, the same rate applies to the refund from the dates of your payments. Because this is a prescribed statutory rate rather than a token penalty buried in the builder's contract, it is usually far more meaningful than the small delay compensation that older builder agreements used to offer.

Is the delay interest separate from any compensation?

Yes, and buyers should not confuse the two. The interest under Section 18 is a defined entitlement tied to the delay itself, calculated at the prescribed rate on the amount you have paid. Separately, the Act allows an allottee to claim compensation for a loss caused by the promoter, which is assessed on the specific facts rather than a fixed formula. In practice, most delayed possession claims turn on the interest, because it is predictable and easy to compute, while a compensation claim requires you to establish an actual loss. For most Bengaluru buyers the interest is the substantive remedy, and it is worth calculating it precisely so you know what you are owed before you enter any negotiation with the builder. Do not accept a builder's offer of a nominal goodwill gesture as though it were the full extent of your entitlement, because the statutory interest is very often larger.

Does a revised possession date reset your rights?

Not automatically, and this is where many buyers are quietly talked out of their rights. Builders often issue letters announcing new possession dates or ask buyers to sign addenda extending the timeline. Signing away the original agreed date can weaken your Section 18 claim, so you should understand what you are being asked to accept before you sign anything. The date that anchors your right is the one in your registered agreement for sale. If a builder wants to revise it, that is a negotiation in which you hold the Section 18 right, not a formality to be waved through. When in doubt, take advice before agreeing to a new date, because you may be giving up interest you are otherwise entitled to.

The steps to claim your Section 18 rights

If your possession date has passed, this is the practical sequence to move from grievance to recovery.

1. Find the exact possession date written in your registered agreement for sale.
2. Gather all payment receipts and the demand letters the builder sent.
3. Decide whether you want to withdraw with a refund or continue with interest.
4. Send the builder a written notice recording the delay and your claim.
5. File a complaint with the Karnataka RERA authority if it is not resolved.
6. Compute the interest at the prescribed rate for your paid amounts.
7. Keep every communication in writing to support the complaint record.

Where do you enforce a Section 18 claim in Bengaluru?

You enforce it through the Karnataka Real Estate Regulatory Authority, not through a long civil suit. The authority hears complaints from allottees against promoters and can direct refunds, interest, and compensation under the Act. You file the complaint against the registered project, which is one more reason the project should have been RERA registered in the first place, and why verifying that registration before buying matters so much. For a large Bengaluru development such as Prestige City on Sarjapur Road, the registration number identifies exactly which project and phase your claim attaches to. The process is designed to be more accessible than ordinary litigation, though it still rewards a buyer who arrives with a clean record of the agreement date, the payments, and the delay. Our guide to how a RERA complaint works walks through the timelines and recovery steps, and our coverage of filing a Karnataka RERA complaint for delayed possession shows the route in practice.

Section 18 does not make delay pleasant, but it changes the balance of power. A builder who knows the buyer understands their refund and interest rights is far more likely to negotiate seriously than one facing a buyer who believes waiting is the only option. Read your possession date, keep your payment record, and treat the missed date as the start of a claim rather than the start of an indefinite wait. The buyers who recover the most are simply the ones who acted on the date in their agreement instead of the date in the builder's latest letter.

Frequently asked questions

What are my rights if a builder delays possession under RERA?

Under Section 18 of the Real Estate Regulation and Development Act 2016, if the builder misses the possession date in your agreement you can either withdraw and get a full refund of what you paid with interest, or continue in the project and claim interest for every month of delay until possession. The right is triggered by the missed agreement date.

What interest can I claim for delayed possession in Karnataka?

The interest rate is fixed by the Karnataka RERA rules at the State Bank of India's highest marginal cost of lending rate plus two percent. It applies for every month of delay from the agreed possession date until handover if you continue, or on your refund from the payment dates if you withdraw.

Should I withdraw or keep waiting for my flat?

It depends on your situation. Withdrawing returns your full amount with interest but ends your claim on the flat, which suits buyers who have lost confidence or need the capital. Continuing keeps the home and earns delay interest until handover, which suits buyers who still want the flat. Both are valid rights under Section 18.

Does signing a revised possession date affect my claim?

It can. Your Section 18 right is anchored to the possession date in your registered agreement for sale. Signing an addendum that extends that date may weaken your claim to interest, so understand the effect before agreeing and take advice if a builder asks you to accept a new date.

Last updated 2026-08-12. PropNewz Team.