# RERA Orders Builder to Pay ₹31 Lakh Interest for Delayed Possession

Delayed possession remains one of the most common disputes between homebuyers and real estate developers. A recent order of the Punjab Real Estate Regulatory Authority (RERA) demonstrates that prolonged delay in handing over possession can result in substantial financial liability for a promoter.

## Possession Promised in 2019, Delivered in 2025

In the case reported from Mohali, a homebuyer had purchased a flat in The Lake project at New Chandigarh.

The allotment letter-cum-agreement was executed in July 2015. Under the contractual terms, possession was to be offered within 42 months, subject to a six-month grace period.

RERA treated July 4, 2019 as the relevant possession deadline.

However, physical possession was ultimately handed over only on May 21, 2025, following intervention by RERA.

The delay consequently extended for several years.

## Interest Under Section 18 of RERA

The buyer approached RERA seeking interest for the delay in possession.

RERA relied upon Section 18 of the Real Estate (Regulation and Development) Act, 2016, which provides protection to an allottee where the promoter fails to hand over possession in accordance with the agreed timeline.

In the reported matter, RERA calculated interest at 11% per annum on ₹50 lakh for the period from August 1, 2019 to April 30, 2025.

The resulting interest liability was fixed at approximately ₹31.51 lakh.

## Builder’s Defences Rejected

The promoter raised an arbitration-clause objection, arguing that the agreement prevented RERA from entertaining the complaint.

This contention was rejected.

The authority also rejected the promoter’s attempt to rely on the Covid-19 pandemic as justification for the entire delay, noting that the contractual possession deadline had already expired before the pandemic.

Another defence—that delays in the buyer’s payments justified the delayed possession—was also not accepted because the promoter failed to establish the relevant construction milestones and their connection with the alleged payment delays.

## Additional Area Charge

The dispute also involved an additional 80 square feet of area.

RERA permitted the promoter to charge for the additional area because the agreement had been executed before RERA came into force and the unit had ultimately been sold on a super-area basis.

However, the authority directed that the additional area be charged at the original agreed rate of ₹2,275 per square foot rather than the higher rate claimed by the promoter.

## Maintenance Charges Also Considered

RERA further held that the buyer would not be liable to pay maintenance charges to the promoter until the awarded amount, together with accrued interest, was paid or adjusted.

This exemption would not apply if maintenance had already been handed over to the Residents’ Welfare Association.

## Key Takeaway for Homebuyers

The case demonstrates the importance of preserving:

– The allotment letter
– Builder-buyer agreement
– Possession deadline
– Payment records
– Correspondence with the developer
– Possession-related notices
– Evidence of actual possession
– Details of additional-area charges

A significant delay in possession can result in substantial interest liability for the developer under RERA.

## Conclusion

RERA continues to provide an important remedy to homebuyers facing prolonged possession delays.

The reported order illustrates that a developer cannot automatically escape interest liability by relying on general explanations such as contractual clauses, Covid-related disruption or alleged payment defaults without establishing the factual and legal basis for those defences.

For delayed-possession disputes, Section 18 of RERA can therefore be an important legal remedy for affected homebuyers.

More on 99888-17966