Complete guide to claiming 100% refund with interest (SBI MCLR + 2%) or delayed possession compensation under Section 18 of RERA. Includes MahaRERA, UP RERA, HRERA rules.
8 min readUpdated Jul 20, 2026By Hire Your Vakeel Legal Team
Direct Legal Answer: Under Section 18 of the Real Estate (Regulation and Development) Act, 2016 (RERA), if a builder/developer fails to hand over possession of an apartment or plot in accordance with the Builder-Buyer Agreement terms, the homebuyer has an unconditional legal right to either withdraw from the project with a full 100% refund plus interest or claim monthly delay compensation interest for every month of delay until actual physical handover of possession. The statutory interest rate is benchmarked to the SBI Marginal Cost of Funds Based Lending Rate (MCLR) + 2% (approx. 10.75% to 11.25% p.a.).
Following the Supreme Court's landmark ruling in Newtech Promoters and Developers Pvt. Ltd. v. State of UP (2021), RERA's authority to grant refunds and interest applies retroactively to all ongoing projects registered under the Act.
Statutory Interest Rate Benchmark (SBI MCLR + 2%)
Under Rule 15 of the State RERA Rules, the rate of interest payable by the promoter to the allottee is uniform and pegged to the highest marginal lending rate of the State Bank of India plus two percent:
Statutory Interest Rate = SBI Highest 1-Year MCLR (~8.85%) + 2.00% = ~10.85% per annum
Interest is calculated from the committed date of possession until the date of actual physical refund or valid Occupancy Certificate (OC) offer.
Warrant of recovery sent to District Collector under Section 40(1) RERA.
UP RERA (Uttar Pradesh)
up-rera.in
45 to 60 Days
Strict RC issuance & DM bank account attachment across Noida/Greater Noida.
HRERA (Haryana - Gurugram/Panchkula)
haryanarera.gov.in
60 to 120 Days
Adjudicating Officer passes execution decree as arrears of land revenue.
Karnataka RERA
rera.karnataka.gov.in
90 to 150 Days
Revenue Recovery Certificate routed through Special Tehsildar Bengaluru.
Frequently Asked Questions (FAQs)
Can a builder force me to accept an alternative unit instead of a refund?
No. Under Section 18 of RERA, the choice between receiving a 100% refund with interest or continuing in the project with monthly delay compensation is the exclusive prerogative of the homebuyer, not the developer.
What if the builder does not pay after RERA passes an order?
The homebuyer can file an Execution Application under Section 40 of RERA. The Authority issues a Recovery Certificate (RC) to the District Magistrate (DM) to seize the developer's bank accounts, attach unsold inventory, or auction assets as arrears of land revenue.
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