The Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted to correct the imbalance between builders and homebuyers. If your builder has missed the possession date, RERA gives you clear, enforceable options.

Projects covered

Most residential and commercial projects must be registered with the state RERA authority before they are advertised or sold. Exemptions exist for small projects, generally where the land is 500 sq. m. or less or there are eight apartments or fewer. States can lower these thresholds. The registration page on the state RERA website shows the builder's declared completion date, approvals and quarterly progress, which is useful evidence in any dispute.

Your options when possession is delayed

Under Section 18(1), if the promoter fails to complete or hand over the unit by the date in the agreement for sale, the allottee can choose to:

  1. withdraw from the project and get a full refund with interest at the prescribed rate, plus compensation; or
  2. stay in the project and receive interest for every month of delay until possession is handed over.

In Newtech Promoters v. State of UP (2021), the Supreme Court described the refund right as unconditional and absolute where the promoter fails to deliver on time, regardless of reasons such as unforeseen events or court stays that do not relate to the buyer. The interest rate is set by each state's rules and is commonly linked to the SBI marginal cost of lending rate plus 2%.

In Telangana, the rate is SBI's highest MCLR plus 2%. Our RERA interest calculator works out the interest for delay, or the refund with interest, from your payment dates.

Other protections worth knowing

  • Carpet area pricing: units must be sold on carpet area, the net usable floor area.
  • 10% advance cap (Section 13): the promoter cannot take more than 10% of the price before executing a registered agreement for sale.
  • 70% escrow: 70% of amounts collected from buyers must be kept in a separate account and used only for that project's land and construction.
  • Structural defects (Section 14(3)): the promoter must fix structural defects or poor workmanship reported within five years of possession, free of charge, within 30 days.
  • No changes without consent: the promoter cannot alter the sanctioned plan or specifications without the buyers' consent as the Act requires.

Filing a RERA complaint

  1. Collect documents: agreement for sale, allotment letter, payment receipts, bank statements, correspondence and the project's RERA registration details.
  2. Send a written demand: a letter or legal notice to the builder recording the delay and your choice (refund or interest) strengthens your case.
  3. File online: complaints under Section 31 are filed on the state RERA portal with the prescribed fee. For Telangana, see how to file a TG-RERA complaint.
  4. Hearing: the Authority hears both sides. Proceedings are usually quicker and less formal than civil courts.
  5. Compensation: claims for compensation (as distinct from refund and interest) are decided by the Adjudicating Officer under Section 71. In many states, the refund/interest complaint and the compensation claim are filed in different forms.

Appeals and deposits

An order of the Authority can be appealed to the Real Estate Appellate Tribunal within 60 days. A promoter who appeals must first deposit at least 30% of the penalty, or the full amount payable to the allottee including interest and compensation, under Section 43(5). This discourages appeals filed only to delay payment.

RERA or the consumer commission?

In Imperia Structures v. Anil Patni (2020), the Supreme Court held that RERA does not bar a homebuyer from approaching the consumer commission. The buyer can choose either forum, but should not pursue the same relief in both at once. The choice depends on the amount involved, the relief sought and how quickly each forum decides cases in your state.

Recovering the money

If the builder does not pay after an order, the amount can be recovered as arrears of land revenue through the district collector, and non-compliance can attract further penalties.

Key takeaways

  • If possession is late, you can choose between a full refund with interest and monthly interest until possession.
  • Check the project's RERA registration page. It is valuable evidence.
  • Builders must deposit a substantial amount before appealing an order in your favour.
  • The consumer commission remains an alternative forum.