If a builder fails to hand over your flat or villa by the date in the agreement, Section 18 of RERA gives you a choice: withdraw and get a full refund with interest and compensation, or stay in the project and receive interest for every month of delay until possession. You can pursue this before TNRERA in Tamil Nadu, or file a complaint before a consumer commission, and the Supreme Court has confirmed that both routes are open. The right forum depends on what you want: your money back, your home with compensation, or leverage in a larger dispute.
Key takeaways
- RERA Section 18: refund with interest if you exit, or monthly interest for delay if you stay.
- In Tamil Nadu, the prescribed interest is SBI’s highest MCLR plus 2%.
- Consumer commissions are an alternative; jurisdiction depends on the amount you paid (up to ₹50 lakh District, up to ₹2 crore State, above that National).
- One-sided agreement clauses that cap delay compensation at token amounts can be struck down as unfair.
- Document everything: agreement, receipts, emails, the promised date and any extension letters.
First, confirm the delay
Delay is measured against the possession date in your registered agreement for sale, adjusted only for grace periods and force majeure events that the agreement and law genuinely allow. Compare that date with the completion date the promoter declared on the TNRERA portal and any extension TNRERA granted. A promoter’s unilateral “revised date” in a newsletter does not change your agreement. Our guide to checking a project on TNRERA shows where to find these dates.
Your options under RERA
| Option | What you get | Where to file in Tamil Nadu |
|---|---|---|
| Withdraw from the project | Full refund of amounts paid, with interest from each payment date, plus compensation | Refund with interest: TNRERA (Form M). Compensation: Adjudicating Officer (Form N) |
| Stay in the project | Interest for every month of delay until possession is handed over | TNRERA (Form M) |
| Defective title or structure | Compensation; rectification of structural defects within five years of possession | Adjudicating Officer, or TNRERA for directions |
The Tamil Nadu Real Estate (Regulation and Development) Rules, 2017 fix the interest rate at the State Bank of India’s highest marginal cost of lending rate plus 2%, and set a time limit for refunds once they fall due. The Supreme Court’s 2021 ruling in Newtech Promoters confirmed that the Authority decides refund and interest, while the Adjudicating Officer decides compensation. For background on your rights, see RERA explained.
Your options under consumer law
A home buyer who pays for construction is a consumer of a service, and delay is a “deficiency in service” under the Consumer Protection Act, 2019. The Supreme Court held in Imperia Structures v Anil Patni (2020) that RERA does not bar a consumer complaint; the remedies run side by side, although you cannot pursue the same relief in both forums at once.
| Consumer commission | Amount paid as consideration |
|---|---|
| District Commission (for example, Coimbatore) | Up to ₹50 lakh |
| State Commission, Chennai | Above ₹50 lakh and up to ₹2 crore |
| National Commission, New Delhi | Above ₹2 crore |
These limits come from the Consumer Protection (Jurisdiction) Rules, 2021 and are based on the value paid, not the total price. Complaints can be filed online through the e-Daakhil portal. The general limitation period is two years from the cause of action, but courts often treat continuing non-delivery as a continuing wrong. File promptly rather than rely on that.
RERA or consumer commission?
- RERA is specialised, usually faster, and applies a statutory interest rate. It works best when the project is registered and your claim is mainly refund or delay interest.
- Consumer commissions can award compensation for mental agony and litigation costs, and are useful for unregistered or older projects.
- Civil courts remain available for complex title or contractual disputes, but are slower.
Unfair clauses in the agreement
Many older builder agreements capped delay compensation at a small amount per square foot per month, while charging buyers much higher interest for late payment. In Pioneer Urban Land v Govindan Raghavan (2019), the Supreme Court held that a buyer cannot be bound by such one-sided terms. Under RERA, the rate of interest is the same in both directions.
If the builder is insolvent
Home buyers are treated as financial creditors under the Insolvency and Bankruptcy Code. A petition against a real estate company requires at least 100 allottees or 10% of the allottees in the same project, whichever is less. Insolvency can revive a stalled project or lead to liquidation, so take advice before choosing this route.
Step-by-step plan
- Collect the agreement, allotment letter, receipts, bank statements, emails and brochures.
- Calculate the delay from the agreed date, and the interest at the prescribed rate.
- Send a legal notice asking for possession with interest, or a refund, within a fixed time.
- Coordinate with other buyers in the project. Joint complaints and shared evidence strengthen your case.
- File before TNRERA or the appropriate consumer commission.
- Keep paying any instalments that are genuinely due, unless you have chosen to withdraw, so you are not the party in default.
Avoiding the problem next time
A ready-to-move home with a completion certificate removes delay risk entirely. If you buy under-construction, check the promoter’s track record on past TNRERA projects, look at progress reports and prefer construction-linked payment plans.
Frequently asked questions
How much interest will I get for delayed possession in Tamil Nadu?
Under the Tamil Nadu RERA rules, SBI’s highest MCLR plus 2% a year, calculated from the agreed possession date for buyers who stay, or from each payment date for buyers who withdraw. Check the current SBI MCLR on the bank’s website.
Can I file in both RERA and the consumer commission?
Both remedies exist, but you should not seek the same relief in both forums at the same time. Choose one route for each claim, with your advocate’s advice.
Can the builder cite COVID or other force majeure?
Only to the extent the agreement and the law allow and the event actually caused the delay. Regulators granted specific extensions during the pandemic; check what applied to your project on the TNRERA portal.
Should I stop paying instalments if the project is delayed?
Not without advice. If you stay in the project, stopping payments can put you in default. If you withdraw, communicate that decision in writing and claim a refund.
This article is general information as of September 2026, not legal, tax or financial advice. Rules and rates change; confirm with a qualified advocate, chartered accountant or the relevant department before you act.
References
- Tamil Nadu RERA Rules, 2017 (Rules 18, 19, 37, 38)
- PIB: Consumer Protection (Jurisdiction) Rules, 2021
- TNRERA official website
- e-Daakhil consumer complaint portal
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