A missed possession date is not merely a breach of contract — it triggers a statutory right under Section 18 to either walk away with a full refund and interest, or stay and be paid for every month of delay. AMLEGALS maps the election, computes the interest, and litigates the claim to recovery.
Before RERA, a homebuyer facing delay was left to contractual penalty clauses that were typically one-sided — a few rupees per square foot per month against the promoter, while the allottee paid full interest on default. Section 18 inverted that asymmetry. The remedy is statutory, the interest rate is prescribed and reciprocal, and the right to refund on delay is, as the Supreme Court held in Newtech Promoters (2021), unconditional and not defeated by the promoter's offer to complete later.
The real strategy lies in the election. Withdrawing with a refund makes sense where the project is stalled or the client needs the capital; continuing with delay interest makes sense where the asset has appreciated and completion is near. The decision is irreversible in practice, and it must be made with a clear view of the interest computation, the validity of any possession offer, and the promoter's solvency.
Advising the allottee on the Section 18 election — withdraw with refund and interest, or continue with delay interest — based on project viability, market value and the client's objectives.
Precise computation of interest at the State-prescribed rate (commonly SBI MCLR + 2%) from the committed date to valid possession, with statements that withstand tribunal scrutiny.
Testing whether the promoter's offer of possession is valid — occupancy/completion certificate, completed common areas, and conformity with the sanctioned plan.
For promoters: genuine force majeure, allottee default, grace-period arguments, and quantum challenges, with contemporaneous documentary support.
Compensation claims before the adjudicating officer under Section 71 where loss exceeds statutory interest, with proof of actual loss (rent paid, loan interest).
Recovery of interest orders under Section 40 and appeals to the Real Estate Appellate Tribunal under Section 44.
Section 18 of the Real Estate (Regulation and Development) Act 2016 provides that if a promoter fails to complete or is unable to give possession of an apartment, plot or building by the date specified in the agreement for sale, the allottee has two options: (a) withdraw from the project and receive a refund of the entire amount paid with interest and compensation; or (b) if the allottee does not wish to withdraw, continue in the project and receive interest for every month of delay until possession is handed over. The right is at the allottee's election.
The rate of interest is prescribed by the State RERA rules and is generally uniform for both promoter and allottee (Section 2(za) read with the rules). Most State rules fix it at the State Bank of India's highest Marginal Cost of Lending Rate (MCLR) plus 2%. The same rate applies whether the promoter pays the allottee for delay or the allottee pays the promoter for default, ensuring parity. The interest typically runs from the committed date of possession until actual offer of valid possession.
Where the allottee elects to withdraw under the first limb of Section 18, the refund of the amount paid carries interest from the respective dates of payment until refund, and separate compensation may be adjudicated under Section 71. Where the allottee elects to continue, interest is payable for the delay period. The allottee cannot simultaneously withdraw and continue; the two limbs are alternatives. The Supreme Court in Newtech Promoters (2021) held the Section 18 refund right is unconditional once the committed date is missed.
Force majeure may be a defence only where the agreement for sale genuinely provides for it and the event is beyond the promoter's control (for example, a court stay on construction or a specific government order). Routine causes — delayed approvals attributable to the promoter, labour or funding shortfalls, or general market conditions — are not accepted. Tribunals have taken a limited view of pandemic-related extensions, allowing only the actual lockdown period where supported by evidence.
Delay is measured from the date of possession committed in the agreement for sale, not from any later or oral assurance. Where the agreement provides a grace period, it is read strictly. The delay runs until the promoter offers valid possession — meaning possession of a completed apartment with an occupancy/completion certificate, not a paper offer. An offer without the requisite certificate is generally not treated as valid possession.
No. No engagement is treated as accepted until conflicts, scope and terms are confirmed in writing.
Share the committed possession date, payments made and current status for a confidential preliminary assessment.