Delayed Possession of Property – Buyer Rights, Remedies & Next Steps
Feb 20, 2024
Experiencing delayed possession of property can be deeply stressful for homebuyers who have invested savings, time, and, in many cases, have ongoing EMIs. “Delay” generally refers to the builder’s failure to hand over possession by the date promised in the Builder–Buyer Agreement (BBA), including the agreed grace period. When this happens, buyers are entitled to several remedies under RERA and consumer-protection laws.
This guide explains your rights, legal options, and effective ways to tackle delayed possession of your property.
What Counts as ‘Delay’ and Why It Happens
Before exploring how to tackle the delayed possession of your property, it helps to understand why delays occur.
A possession delay occurs when the builder fails to deliver the unit by the committed date under the BBA. Understanding the cause helps determine the appropriate remedy.
Common causes of delay
- Regulatory approvals getting stalled
- Builder’s financial stress or fund mismanagement
- Construction-quality issues requiring rework
- Delays in land acquisition or layout changes
- Labour shortages or supply-chain disruptions
- Genuine force majeure events (natural calamities, lockdowns)
Before taking action, buyers should recheck the agreement for:
- Committed possession date
- Applicable grace period, if any
- Clauses defining force majeure and compensation
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Your Rights Under RERA (Section 18)
RERA Section 18 empowers buyers when the delay is attributable to the promoter. If the project is registered under RERA and the builder defaults, you can seek a remedy through one of the following legally defined options.
Your key rights under Section 18
- Right to withdraw from the project
- Full refund of the amount paid, with interest as prescribed under the RERA Act.
- Right to continue with the project
- Interest/compensation for every month of delay until possession is actually handed over, at the prescribed rate.
Your two core choices
Option A: Exit & claim refund with interest
Ideal when construction is stalled, the builder is unresponsive, or the project shows no realistic progress.
Option B: Stay & claim the monthly delay interest
Suitable when the project is close to completion, and you prefer possession over a refund.
If the builder refuses to honour these obligations, the buyer may file a complaint before the respective State RERA authority.
RERA vs Consumer Commission – Where Should You File?
Both forums are active in cases involving delayed possession of property. The right forum depends on the nature of the relief sought.
RERA vs Consumer Commission
| Criteria |
RERA |
Consumer Commission |
| Primary focus |
Project delay, possession, refund, and interest for delay |
Deficiency in service, unfair trade practices, and misrepresentation |
| Speed of disposal |
Generally quicker due to real estate–specific mechanism |
May take longer depending on case load and complexity |
| Relief available |
Refund, interest, penalty, compensation, and direction to complete construction |
Refund, compensation (including for mental agony), and punitive damages |
| Technical expertise |
Strong real estate–focused approach |
Broad jurisdiction across consumer disputes |
| Best suited for |
Delay-interest claims, possession enforcement, builder compliance |
Larger claims for compensation, harassment, or misleading commitments |
Many buyers choose to file in the forum that aligns with the remedy they want most, and in some cases, proceed in both forums depending on circumstances.
Step-by-Step: What to Do When Possession Is Delayed
If you are evaluating how to tackle delayed possession of your property, follow this structured sequence to protect your rights and build a strong case.
Checklist
- Re-read the BBA
Review the possession clause, grace period, and force-majeure terms.
- Send a written notice to the builder
Formally communicate the delay and request a revised timeline or compensation details.
- Calculate the actual delay
Compare the promised possession date vs. the present status; include the grace period.
- Decide whether to continue or withdraw
Analyse current construction progress and your financial position.
- File before the RERA or the Consumer Commission
Choose the forum based on whether you want interest, refund, compensation, or a combination.
- Track the interest/refund awarded
Ensure the builder complies with the order; escalate if not executed.
- Coordinate with your lender
Home-loan borrowers should inform the lender, especially if planning a refund or exit.
This sequence represents the essential steps to tackle the delayed possession of your property in a timely and organised way.
Documents & Evidence You’ll Need
Prepare the following documents before filing a complaint:
- Allotment letter
- Builder–Buyer Agreement
- Payment receipts and bank statements
- Promised possession date/construction schedule
- Builder emails, notices, and commitments
- Site photographs, progress reports
- Home-loan sanction letter and EMI proof
- Any revised timelines given by the developer
Comprehensive documentation strengthens your claim before both RERA and Consumer Commissions. The exact documents required may vary based on your specific facts and the forum you choose.
Interest, Compensation & Recent Judgments – What to Expect
Compensation depends on contract terms, forum, and factual circumstances. RERA generally awards interest at the rate prescribed by the State RERA rules (often linked to the SBI MCLR + spread). Consumer Commissions may award higher compensation in cases of clear deficiency in service.
Key judicial precedents
- Courts have awarded simple interest of up to 18 % in cases where the delay was unjustified.
- Many judgments hold that a prolonged construction standstill amounts to unfair trade practice.
- The Supreme Court has clarified that builders are not automatically liable to reimburse the buyer’s home-loan interest, and refunds must align with contractual terms and the relief granted by the adjudicating authority.
Conclusion – Act Early, Document Everything, Choose the Right Forum
Possession delays are unfortunate, but buyers have strong statutory protection. Understanding how to tackle delayed possession of your property ensures that you take informed action – whether that is claiming monthly interest, pursuing a refund, or filing before RERA or the Consumer Commission. Keep all communication documented, act promptly, and maintain alignment with your home-loan provider.
If you are exploring homeownership, SMFG Grihashakti offers tailored housing loans of up to 90%* of the property’s value at competitive interest rates starting from 10%* per annum. Check your home loan eligibility, estimate your EMIs, and apply online with ease.
FAQs – Delayed Possession of Property
What happens if my property possession is delayed beyond the committed date?
You can seek compensation or a refund with interest under RERA Section 18, or file a deficiency-of-service claim before the Consumer Commission.
Under RERA Section 18, can I choose a refund with interest instead of waiting?
Yes. You may withdraw and receive a full refund with interest if the delay is attributable to the builder.
If I stay with the project, how is the monthly delay-interest calculated and paid?
Interest is typically calculated as per the State RERA-prescribed rate and paid monthly until actual possession.
Should I file a complaint with RERA or the Consumer Commission for the delay?
RERA is preferable for project-specific remedies like refund/interest; Consumer Commissions are suitable for wider compensation and service-deficiency claims.
Will the builder reimburse the home-loan EMIs/loan interest I paid during the delay?
Not automatically. Courts have held that home loan interest reimbursement is not a default entitlement unless contractually or factually justified.
What documents are required to prove the delay and claim interest/refund?
Your BBA, allotment letter, payment proofs, promised possession date, communications, and construction-status evidence.
Can a builder extend the possession date citing force majeure, and what if I disagree?
A genuine force majeure event may justify a limited extension. If you dispute the claim, you can approach RERA or the Consumer Commission for adjudication.
How long does it typically take to get a refund/relief order in delayed-possession cases?
Timelines vary by State RERA or Consumer Commission, but many cases receive orders within a few months, with execution depending on compliance by the builder.
What are the RERA rules for delayed possession?
Section 18 of RERA addresses delays in possession by the promoter, offering consumers two choices. They can opt to terminate the agreement, prompting the promoter to refund the entire amount paid with interest. Alternatively, consumers can choose to continue with the project, seeking compensation from the builder for each month of delay until possession. This provision ensures that consumers have recourse and flexibility in navigating project delays as outlined in the regulatory framework.
How much is the RERA penalty for delay in possession?
If the promoter fails to complete the project within the agreed time or delays property possession, they are obligated to refund the amount received from the buyer along with the corresponding interest. The interest rate is typically set at 10% of the total amount invested by the buyer, ensuring compensation for the delay in project completion as per the terms outlined in the sale agreement.
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Disclaimer: *Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG Grihashakti. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG Grihashakti’s policy at the time of loan application. If you wish to know more about our products and services, please contact us.