Three Ways Out of a Stalled Bengaluru Project, and What Each Asks of a Buyer

Three routes, three different decision-makers. When a Bengaluru housing project slows to a halt, a buyer's options under official rules fall into three broad groups: make an individual claim against the promoter, take part in completing the project through the association of allottees, or hope the project attracts last-mile funding. The first is your choice. The second depends on the regulator revoking the project's registration. The third depends on a fund's investment committee.

This guide sets out what the Ministry of Housing and Urban Affairs' FAQ on the RERA Act and a Press Information Bureau explainer on SWAMIH dated 13 March 2026 say about each route, side by side. It does not assess any project or recommend a route.

The short answer. Under Section 18, MoHUA's FAQ says a buyer can withdraw with a full refund plus interest and compensation, or stay and receive interest for every month of delay. If registration is revoked, Section 8 lets the Authority arrange completion, with the association of allottees holding the first right of refusal. Separately, the SWAMIH fund lends to RERA-registered, net worth positive projects stalled mainly for lack of funds, with Bangalore units capped at 200 sq m and under Rs 1.5 crore. The trade-off: the individual route is in your hands but depends on the promoter's ability to pay, while the collective routes can deliver a finished home but depend on decisions others make.

What is the individual route under Section 18?

A claim that you choose and pursue. The FAQ says Section 18 covers situations where the promoter fails to hand over possession. "In such case, the allottee has the right to withdraw from the project and claim a full refund along with interest and compensation. Alternatively, if the allottee chooses to stay with the project, he is entitled to interest for every month of delay until possession is handed over and also for compensation in certain circumstances."

The FAQ adds that the rate of interest payable by the promoter and the allottee on default is the same, and that the rate is specified in state rules. For a Bengaluru buyer, that means Karnataka's rules decide the rate.

A refund ends your stake in the project. Staying keeps your flat but means more waiting. PropNewz set out how the delay-interest route interacts with a running home loan in our guide to delayed possession with pre-EMI running.

What happens if the regulator revokes the project?

A collective route opens. The FAQ says Section 7 lets the Authority revoke a project's registration for specified violations, but only as "a last resort" and "after providing a reasonable opportunity of being heard." Once a project is revoked, it says Section 8 provides that the Authority, in consultation with the government, "may take action to carry out the remaining development works by competent authority or by the association of allottees or in any other manner." It adds that "the association of allottees shall have the first right of refusal for carrying out the remaining development works."

This route depends on an Authority decision, and taking up the first right of refusal depends on an association that is organised and able to act. It suits buyers who want the flat rather than their money back, and who are prepared to work together.

Where does SWAMIH fit?

As a funding route that sits outside the RERA complaint process. The PIB explainer says SWAMIH, launched in 2019, "provides last-mile financing to housing projects affected by financial constraints." It lists eligibility conditions: the project must be stalled or delayed mainly because of insufficient funding, registered under RERA, in the affordable or mid-income category, net worth positive, with priority to projects close to completion.

For Bangalore, the explainer defines eligible units as those up to 200 sq m of RERA carpet area priced below Rs 1.5 crore. It says projects classified as NPAs or before the NCLT are also eligible for consideration, and that all funding applications are examined by the fund's Investment Committee after due diligence and consultation with existing lenders and legal advisors.

PropNewz explained the fund's eligibility tests and its Bengaluru case study in detail in today's guide to SWAMIH and SWAMIH Fund-2.

Do the routes conflict?

They can pull in different directions, which is why buyers in the same project should talk early. A buyer who takes a refund leaves the project. A buyer who stays, and an association that wants to complete the work or attract funding, are betting on completion. In our reading of the sources, nothing in the FAQ or the PIB explainer says one buyer's choice binds another's, but the overall outcome for a project may depend on how many buyers choose each path.

There is also a question of money. Refunds and delay interest are claims against the promoter. A last-mile lender, by contrast, puts money into finishing the project. Whether a stalled project can support both depends on its finances, which is one reason the SWAMIH explainer's "net worth positive" test matters.

How long does each route take?

The sources give targets for some steps, not guarantees for any. For the individual route, MoHUA's FAQ says Section 29 asks the Authority to endeavour to dispose of complaints as expeditiously as possible and not later than sixty days from filing, recording reasons where it cannot. Appeals go to the Appellate Tribunal, which the FAQ says has a similar sixty-day target under Section 44, and from there to the High Court.

For the collective route, revocation comes only after the promoter has had a reasonable opportunity of being heard, so it involves a process before Section 8 even applies. After that, the time to finish depends on how much work remains and who takes it on.

For last-mile funding, the PIB explainer gives examples rather than timelines. It says one Bengaluru project funded in September 2020 was completed within about four years of that investment, and other examples within about two years. Those are case studies, not promises for any other project.

The practical point is that no route is quick. A buyer choosing between them is choosing which kind of wait, and which kind of risk, suits their situation.

What if an order in your favour is not paid?

There is a recovery route. The FAQ says that if a promoter, allottee or agent fails to pay any interest, penalty or compensation imposed by the Adjudicating Officer, Regulatory Authority or Appellate Authority, the amount "becomes recoverable as an arrear of land revenue," which "means it can be collected through government mechanisms similar to recovering unpaid taxes or dues."

That matters for the individual route: winning a refund order and collecting it are two different steps. If you choose the refund path, plan for the possibility of a recovery stage, and keep a record of every payment and order so that a recovery claim can be made without delay.

How should a Bengaluru buyer in a stalled project decide?

By gathering the facts first and making the choice second.

1. Check the project's RERA registration status, declared completion date and latest quarterly update.
2. Write down what you have paid, what your loan stands at, and what you still owe under the agreement.
3. Decide whether your priority is your money back or the flat, and note what each would mean for your finances.
4. Join or help form an association of allottees, so collective routes remain open.
5. If you choose the individual route, file a complaint that asks clearly for refund or delay interest under Section 18.
6. If the project may qualify for last-mile funding, ask the association or authorised representative whether it has been explored.
7. Take legal advice before deciding, and keep every document, notice and order in one file.

Frequently asked questions

What can I claim if my Bengaluru flat is delayed?

MoHUA's RERA FAQ says Section 18 lets an allottee withdraw and claim a full refund with interest and compensation, or stay in the project and receive interest for every month of delay until possession, along with compensation in certain circumstances. The choice is the buyer's to make.

Can buyers complete a stalled project themselves?

If a project's registration is revoked, MoHUA's FAQ says Section 8 allows the Authority, with the government, to have the remaining work done by a competent authority, by the association of allottees or otherwise. The association of allottees has the first right of refusal.

Can SWAMIH fund my stalled project?

A PIB explainer of 13 March 2026 says SWAMIH lends to RERA-registered, net worth positive projects stalled mainly for lack of funds, with units up to 200 sq m and under Rs 1.5 crore in Bangalore. Applications are examined by the fund's Investment Committee after due diligence.

Is refund or waiting better in a stalled project?

It depends on the project and your finances. A refund ends your involvement but depends on the promoter's ability to pay, while staying keeps your flat but extends the wait. Read the order route, the project's finances and your loan position, and take legal advice before choosing.

This article summarises MoHUA's general FAQ on the RERA Act and a PIB explainer for information only. It is not legal or financial advice, and it does not suggest that any project will be revoked, completed or funded.

Last updated 2026-11-11. PropNewz Team.