When the builder is late

Our guide to what a possession date means covers how to read one against a project’s build progress, and what a slipping date implies. This guide picks up from there: the date has passed, or is clearly going to, and you want to know what you can actually do about it.

RERA gives you a choice, not just a complaint to file. You can withdraw and get every rupee back with interest (our guide to cancellations and refunds covers the mechanics), or stay in the project and be paid for every month you wait. Both routes run on the same interest rate, and this guide works it out, charts it month by month, and then covers how a complaint is filed, how an unpaid order gets enforced, what an appeal costs the promoter, and the two routes outside RERA – the consumer commission, and, for a builder in real trouble, insolvency.

Two ways to respond

Section 18 of the RERA Act sets out both choices. If a promoter fails to complete the project or hand over possession by the date fixed in the agreement, and you want out, the promoter must “return the amount received by him… with interest at such rate as may be prescribed… including compensation.” If you would rather keep the flat, the same section entitles you instead to “interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.” Section 19(4) restates the same right from your side, as something you are entitled to claim, not something the promoter may choose to offer.

Either way, the rate is set by the Karnataka RERA Rules at the State Bank of India’s highest marginal cost of lending rate plus two percentage points – 10.80% as this is written, and the next section shows exactly where that number comes from. Take a buyer who has paid ₹60 lakh on a flat now 18 months late. Withdraw, and the full amount comes back in one payment with ₹9.72 lakh of interest on top – ₹69.72 lakh in all. Stay, and the same money keeps earning ₹54,000 a month for as long as the delay runs, on top of still getting the flat.

The rate, worked month by month

Karnataka RERA Rule 16 fixes the rate itself: “the State Bank of India highest marginal cost of lending rate plus two percent,” for interest either side owes the other under the Act or the Rules. SBI publishes its MCLR by tenor, and the Rules take the highest one it quotes – the three-year rate, 8.80% with effect from 15 Aug 2026. Add two points and the figure is 10.80%.

Neither the Act nor the Rules say this interest compounds. Rule 16 states a flat annual rate and stops there; the only mention of “compounding” anywhere in the Rules concerns settling minor offences, not interest. Absent a compounding rule, treat it as simple interest: the same amount every month, not interest charged on interest already owed. On ₹60 lakh, that is 10.80% ÷ 12 = 0.90% a month, ₹54,000 – the same ₹54,000 in month one as in month eighteen.

A straight line, not a curve – because nothing compounds. Every month adds the same ₹54,000, so the amount owed after any given month is just ₹54,000 times the number of months. That also means there is no penalty for a promoter who stays quiet about a delay: the interest a slow promoter eventually pays is exactly what it would have paid if it had told you from month one, so chasing a stalled complaint costs you nothing in interest terms – only time.

If the delay has a real cause

A promoter is not without recourse. Section 6 lets K-RERA extend a project’s registration on the promoter’s application, but only for force majeure – defined narrowly as “war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project” – and only after giving the promoter a hearing, with reasons recorded in writing. Extensions granted this way cannot, in total, run past one year. A generic reference to “market conditions” or a contractor dispute does not qualify; the bar is a calamity, not ordinary business risk.

An extension changes the project’s registered timeline, which is exactly why it is worth checking rather than assuming: our guide to reading a Karnataka RERA filing shows where an extension shows up on the record, and the possession-date guide covers checking the date itself before you pay. What this guide adds is the cap: even a genuine force majeure buys a promoter at most a year, in aggregate, before the section 18 clock above applies in full.

Filing a complaint with K-RERA

Refund and interest, or compensation

RERA complaints under sections 12, 14, 18 and 19 can look like they go to two different places, because both the Act and the Rules use the word “compensation” loosely. The Supreme Court settled it in 2021: a refund-and-interest claim – exactly what section 18 gives you – goes straight to the Regulatory Authority itself, not to the separately appointed adjudicating officer. “If there is any breach or violation of the provisions of Sections 12, 14, 18 and 19 of the Act by the promoter, such a complaint straightaway has to be filed before the regulatory authority. What is being referable to the adjudicating officer is for adjudging compensation.” The adjudicating officer’s role is narrower: a distinct claim for compensation, decided under section 71 with due regard to factors listed in section 72 – disproportionate gain to the promoter, loss caused to you, and whether the default is repeated. That claim must be disposed of within 60 days, or the adjudicating officer must record in writing why not.

In practice, Karnataka’s own forms follow the same split: a general complaint to the Authority uses Form N under rule 29 of the K-RERA Rules; a compensation claim for the adjudicating officer uses Form O under rule 30. Both carry a ₹1,000 fee, paid by demand draft to the Authority. For most delay cases – you simply want your money and its interest, or to keep being paid monthly – Form N to the Authority is the right route.

What the complaint needs

K-RERA’s own portal takes the complaint online: register with your name, phone number and email, log in, fill the complaint form with the respondent and project details, attach your supporting documents with a caption for each, preview the whole filing, and pay online – the portal accepts e-payment only, through a listed set of banks. Have ready: your registered agreement, proof of what you have paid, and copies of any notice already exchanged with the promoter. Form N also asks you to declare that the same matter is not already pending before any court, authority or tribunal, so check that before you file.

Getting the order enforced

An order in your favour is not the end if the promoter simply does not pay. Section 40(1) gives it teeth: any interest, penalty or compensation a promoter fails to pay, once imposed by the adjudicating officer, the Authority or the Appellate Tribunal, “shall be recoverable from such promoter… in such manner as may be prescribed as an arrears of land revenue” – the same coercive machinery the state uses to collect unpaid land revenue, including attachment and sale of property, run through the district administration rather than a civil court.

Whether that covers the refunded principal itself, and not just interest or penalty on top of it, was genuinely unclear until the Supreme Court read the Act as a whole in 2021 and closed the gap: “the amount which has been determined and refundable to the allottees/home buyers either by the authority or the adjudicating officer in terms of the order is recoverable within the ambit of Section 40(1) of the Act.” So an order for your full ₹69.72 lakh, not merely the ₹9.72 lakh of interest inside it, can be pursued as arrears of land revenue if the promoter ignores it.

Appeals to the tribunal

Either side can appeal an order to the Karnataka Real Estate Appellate Tribunal within 60 days of receiving it, a limit the Tribunal can extend if it is satisfied there was good reason for the delay. The Tribunal is expected, though not strictly bound, to decide the appeal itself within a further 60 days, recording its reasons if it cannot.

One condition applies only to the promoter, and it is worth knowing if you are on the receiving end of a stalling appeal: “where a promoter files an appeal with the Appellate Tribunal, it shall not be entertained, without the promoter first having deposited with the Appellate Tribunal atleast thirty per cent. of the penalty, or such higher percentage as may be determined by the Appellate Tribunal, or the total amount to be paid to the allottee including interest and compensation imposed on him.” A promoter cannot simply appeal to buy time; it has to put at least 30% of what it owes you on the table first, before the Tribunal will even hear the case.

The consumer commission route

RERA is not the only forum, and choosing it does not use up your other options. The Supreme Court confirmed this directly in a case brought by buyers who had gone to a consumer commission rather than RERA: section 79’s bar on civil courts hearing RERA matters does not reach a consumer commission, since a commission is not a civil court, and section 18’s own wording – a right “without prejudice to any other remedy available” – confirms Parliament meant to leave the choice with you. Citing an earlier three-judge ruling, the Court put it plainly: “Remedies that are given to allottees of flats/apartments are therefore concurrent remedies, such allottees of flats/apartments being in a position to avail of remedies under the Consumer Protection Act, 1986, RERA as well as the triggering of the [insolvency] Code.”

Where you file depends on how much is at stake, under rules the Consumer Affairs Ministry set in December 2021:

A consumer complaint can take longer to reach a final hearing than a K-RERA order, but it can also award something RERA’s adjudicating officer cannot: broader consumer-law compensation for the trouble the delay has caused you, beyond the fixed interest rate. Weighing the two is a genuine choice, and worth a conversation with a lawyer who has taken both routes before.

If the promoter is insolvent

A promoter that has simply run out of money is a different problem from one that is merely slow, and the law treats it differently. The Insolvency and Bankruptcy Code counts what you paid as a “financial debt,” putting you in the same class as a bank that lent the promoter money: “any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing,” which makes you a financial creditor rather than someone standing at the back of the queue.

That status lets you push the promoter into insolvency resolution – but not alone. The Code requires allottees to act together: an application “shall be filed jointly by not less than one hundred of such allottees under the same real estate project or not less than ten per cent. of the total number of such allottees under the same real estate project, whichever is less.” On a 40-flat project, that is four buyers; on an 800-flat one, it is 80. This is a collective, last-resort route – it puts the whole project into resolution proceedings rather than getting you paid individually and quickly – so it is worth reaching for only once it is clear the promoter cannot deliver at all, not simply that it is late.

Before you file a complaint

• Decide withdraw or stay before you file – the relief you ask for follows from that choice.
• Work out the interest yourself: SBI’s current highest MCLR, plus two points, simple interest on what you paid, for each month of delay.
• Check whether an extension was granted, and whether it was for a genuine force majeure within the one-year cap.
• File Form N with the Authority for a refund and interest; keep a distinct compensation claim, if you have one, for Form O.
• Have your agreement, payment proof and any notices ready before you start the online filing.
• If an order goes unpaid, ask about recovery as arrears of land revenue under section 40 rather than waiting indefinitely.
• Weigh the consumer commission against K-RERA if your claim is large or the harm goes beyond the interest rate.