IndiaA builder delayed possession of my flat. Can I claim compensation?
Yes, you can claim compensation for delayed possession of your flat under RERA and the Indian Contract Act. Builders must pay interest at 2% above SBI’s marginal cost lending rate (MCLR) for every month of delay.
What the Law Says
The Real Estate (Regulation and Development) Act, 2016 (RERA) and the Indian Contract Act, 1872 govern builder liability for delayed possession. RERA mandates timely delivery and prescribes mandatory compensation.
Under RERA, every real estate project with land over 500 sq. m or more than 8 apartments must be registered. Builders who fail to hand over possession by the promised date are liable to pay interest to the buyer.
Section 18(1) of RERA states that if a promoter fails to give possession on time, they must pay interest for every month of delay — at the rate prescribed by the Authority. The Real Estate (Regulation and Development) Rules, 2016 specify this as 'two per cent over the State Bank of India's marginal cost of funds based lending rate (MCLR)'.
Additionally, Section 74 of the Indian Contract Act, 1872 allows recovery of reasonable compensation for breach of contract — including delayed possession — even without a specific penalty clause.
Statutory TextIf a promoter fails to give possession of the apartment, plot or building, as the case may be, to the allottee within the time stipulated in the agreement for sale, he shall be liable to pay interest to the allottee...
— Real Estate (Regulation and Development) Act, 2016, s. 18(1) — Penalty for failure to give possession
Statutory Texttwo per cent over the State Bank of India's marginal cost of funds based lending rate (MCLR)
— Real Estate (Regulation and Development) Rules, 2016, Rule 11(2)(a) — Rate of interest
What Courts Have Said
Indian courts have consistently upheld homebuyers’ right to compensation for delayed possession — reinforcing statutory rights under RERA and contractual remedies.
Held that RERA overrides general contract law and mandates automatic interest liability — no need for buyer to prove loss or negligence.
Directed builder to pay interest at 2% over SBI MCLR from due date till actual possession, rejecting arguments about force majeure without documentary proof.
What to Do
Check your registered Agreement for Sale for the promised possession date and any penalty clauses.
Send a written notice to the builder demanding compensation at 2% over SBI MCLR for each delayed month.
File a complaint with your State RERA Authority within 30 days of the missed possession date.
If unresolved, approach the RERA Adjudicating Officer or file before the Real Estate Appellate Tribunal.
Keep all payment receipts, correspondence, and the agreement — these are critical evidence.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.