RERA complaint for a delayed flat: refund or delay interest

The rule

• Who can claim: an allottee whose promoter fails to complete or give possession “in accordance with the terms of the agreement for sale or … by the date specified therein”, or because its registration was suspended or revoked (s. 18(1)).
• Option 1, withdraw: the promoter must “return the amount received … with interest at such rate as may be prescribed in this behalf including compensation” (s. 18(1)).
• Option 2, stay: “where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession” (proviso to s. 18(1)).
• Same rate both ways: the rate the promoter charges a buyer who pays late must equal the rate the promoter pays when it defaults, and the promoter’s interest runs “from the date the promoter received the amount” until it is refunded (Explanation to s. 2(za)).
• Without prejudice: the refund right applies “without prejudice to any other remedy available” (s. 18(1)). The Supreme Court called it “unqualified” in Imperia Structures Ltd. v. Anil Patni, paragraph 25, quoted in its order of 28 March 2022 in Civil Appeal No. 1816 of 2022.

Who decides what

The Act has two decision-makers inside each state authority:

In paragraph 86 of Newtech, the Supreme Court said that for refund, interest on the refund or interest for delayed possession, “it is the regulatory authority which has the power to examine and determine”, while compensation and interest on it belong to the adjudicating officer. Compensation takes account of the builder’s unfair gain, the buyer’s loss and repeated default (s. 72).

The interest rate, state by state

The Act leaves the rate to the state rules. What Payotte read:

Other states set their own rate. Because the reference rate moves, the percentage depends on the date of the order. The tribunal in Appeal No. 517 of 2023 refused a higher contractual rate, holding that “provisions of law would override any agreement”.

Calculation, not a quote: ₹40,00,000 paid and a rate of 10.70% a year give about ₹4,28,000 of interest per year of delay, or about ₹35,700 per month. Interest on a refund runs from each payment date.

Step by step

1. Check the dates in your agreement and on the RERA project page. See how to check a RERA project registration.
2. Choose your remedy. Refund (withdraw) or delay interest (stay). The Supreme Court put it as “it is up to the allottee to proceed either under Section 18(1) or under proviso to Section 18(1)” (Imperia, paragraph 25).
3. Write to the promoter. Section 18 makes the promoter liable “on demand”. Keep a dated copy.
4. File the complaint with the state authority (s. 31). The form, manner and fee are set by each state. In Uttar Pradesh, a complaint to the Authority is filed on Form M and a claim for compensation to the adjudicating officer on Form N, each with a fee of ₹1,000 (UP rules 33 and 34). The UP-RERA manual describes online filing in its eCourts module, payment of the ₹1,000 through the SBI gateway, and a signed physical copy once the complaint has been cleared.
5. Attach the evidence: agreement, receipts, bank statements, correspondence.
6. Hearing. The authority must dispose of matters within 60 days or record why it did not (s. 29(4)); the adjudicating officer has the same target (s. 71(2)).
7. Enforcement. Interest, penalty or compensation that is not paid is “recoverable … as an arrears of land revenue” (s. 40(1)). Under the UP rules a refund with interest is payable within 45 days of becoming due (rule 16).

Appeals

• To the Appellate Tribunal of the state, within 60 days of receiving the order; late appeals are allowed for “sufficient cause” (s. 44(2)). In Uttar Pradesh the appeal fee is ₹1,000, on Form L (rule 25).
• Builder’s pre-deposit: a promoter’s appeal is not heard until it deposits at least 30% of the penalty, or the total amount payable to the allottee with interest and compensation (proviso to s. 43(5)).
• To the High Court, within 60 days of the tribunal’s order, on the grounds in section 100 of the Code of Civil Procedure (s. 58).
• Civil courts are barred from matters the Authority, the adjudicating officer or the Tribunal can decide (s. 79). Consumer commissions are a separate route: see consumer commission complaints by homebuyers.

Which professional to consult

A property lawyer (advocate) enrolled with the State Bar Council can draft the complaint and compute the interest from each payment date. This guide is general information, not legal advice. See property lawyers.

Sources and limits

The Haryana rate is read in Haryana orders quoting rule 15, not in the rules themselves; Newtech is quoted from a Haryana order, the Supreme Court text being unreachable. The UP rate could not be read.