Short answer: The delayed possession compensation RERA Karnataka buyers can claim comes from Section 18. You can withdraw and get your money back with interest and compensation, or stay and get interest for every month of delay until possession. Karnataka's rate is SBI's highest MCLR plus 2%, which is 10.95% a year on SBI's 15 Oct 2026 rates.
- Two routes, your choice: refund with interest and compensation, or stay and take monthly interest.
- The rate moves with SBI. Highest MCLR (three-year, 8.95% from 15 Oct 2026) plus 2% gives 10.95% a year. That's our reading of the rule; confirm it for your dates.
- On ₹60 lakh paid, a month's delay is worth about ₹54,750 in interest at that rate.
- Which date counts is the real fight. K-RERA's Aug 2026 order added four months to many registered dates.
- Write first, keep everything, then file. A refund is due within 60 days once ordered or agreed.
- What does Section 18 of RERA actually say?
- How much interest does Karnataka RERA award?
- Worked example 1: staying and claiming interest
- Worked example 2: withdrawing with a refund
- Worked example 3: what the Aug 2026 order can do to your count
- Should you take a refund or stay?
- The site, sheet and sum test (our framework)
- How common are delays in Bengaluru?
- How do you file a delayed-possession complaint with K-RERA?
- What if the builder doesn't pay after the order?
- Who pays the EMI during the delay?
- Frequently asked questions
- Talk it through with acre&key
- Sources
A delayed flat hurts in a specific way. You're paying rent and an EMI at the same time, the updates get vaguer, and everyone has an opinion on whether to fight or wait. The law gives you two clear options. Picking between them is the hard part, and that's about your situation more than the law.
If you're not sure what dates the project registered, start by checking the project on RERA Karnataka.
What does Section 18 of RERA actually say?
If the promoter fails to complete or hand over the flat as the agreement for sale says, Section 18(1) gives you a choice (RERA Act, s.18; MoHUA RERA FAQ):
- Withdraw. Get back what you've paid, with interest at the prescribed rate, plus compensation.
- Stay. Get "interest for every month of delay, till the handing over of the possession".
Two more parts matter. Section 18(2) covers loss from defective title, and that claim isn't barred by limitation. Section 18(3) covers compensation when the promoter breaks other obligations under the Act or the agreement.
The choice is yours. A builder can offer a different unit, a discount or rent support, but you don't have to take it in place of your rights.
How much interest does Karnataka RERA award?
Rule 16 of the Karnataka RERA Rules sets the rate at SBI's highest marginal cost of lending rate plus 2%, payable by the promoter or the allottee, whichever owes it (Karnataka RERA Rules 2017). Rule 17 says a refund, with interest and compensation, is payable within 60 days of becoming due.
SBI's MCLR from 15 Oct 2026 (SBI):
| Tenor | MCLR | Plus 2% |
|---|---|---|
| One year | 8.85% | 10.85% |
| Two years | 8.90% | 10.90% |
| Three years (highest listed) | 8.95% | 10.95% |
We read "highest" as the highest tenor listed, which gives 10.95%. That's an inference. The rate in force over your delay period may differ as SBI revises it, so let your lawyer apply the right rate to your dates.
How K-RERA has applied it, from news reports of its orders: interest at SBI MCLR plus 2% on the amounts the buyer paid, running from the due date until possession with the occupancy certificate (The Economic Times, news). In that case, a clause in the later sale deed saying the buyer had no further claims didn't defeat the Section 18 claim. In another, interest was allowed only up to the OC date, because possession could have been taken then (LiveLaw, news). Read these as examples, not as a forecast for your case.
Worked example 1: staying and claiming interest
Illustrative. You've paid ₹60,00,000. Possession was due on 30 Apr 2026 and you take it on 31 Dec 2026, eight months late. Simple interest at 10.95% a year:
| Step | Maths | Amount |
|---|---|---|
| Annual interest | ₹60,00,000 × 10.95% | ₹6,57,000 |
| Per month | ₹6,57,000 ÷ 12 | ₹54,750 |
| Eight months | ₹54,750 × 8 | ₹4,38,000 |
Real orders work on each payment and its date, and the rate can change mid-period, so your figure will differ. The point is scale: on a large sum, each month of delay is real money.
Worked example 2: withdrawing with a refund
Illustrative. You've paid ₹50,00,000 and withdraw. Twelve months' interest at 10.95% on the full amount is ₹5,47,500, so the refund would be about ₹55,47,500 before any compensation. If interest is counted from each payment date instead of the due date, early payments earn more. Which base applies is for the order, and your lawyer, to settle.
Worked example 3: what the Aug 2026 order can do to your count
K-RERA's Order No. K RERA/ADMIN/10/2026 of 10 Aug 2026 gave a four-month blanket extension to registered completion dates on or after 28 Feb 2026, without any application. Projects registered on or after 1 Aug 2026 are excluded. In October 2026 the register didn't yet show the new dates. Across seven Bengaluru taluks, about 1,606 projects qualify.
Take example 1 again. If the registered date was also 30 Apr 2026, it now reads 30 Aug 2026.
| Delay counted from | Months to 31 Dec 2026 | Interest on ₹60 lakh |
|---|---|---|
| Agreement date, 30 Apr 2026 | 8 | ₹4,38,000 |
| Extended RERA date, 30 Aug 2026 | 4 | ₹2,19,000 |
Section 18 ties delay to the agreement for sale, but builders may point to the extended date. Whether the order changes your claim is a legal question, and a ₹2,19,000 one in this example. Raise it with your lawyer before you file. Our answer on what a RERA extension means for you has more.
Should you take a refund or stay?
| Situation | Refund suits you if | Staying suits you if | Check |
|---|---|---|---|
| Construction | Work has stalled | The building is close to done | Last three quarterly updates against the site |
| Housing need | You can buy elsewhere now | You still want this flat | Rent and EMI running together |
| Home loan | You want to close it and start again | It's working for you | How a refund reaches your bank |
| Trust | You doubt they'll finish | You think they'll finish late | How many times dates have moved |
| Market | You'd rather take the money and decide again | A similar flat costs more now | Realistic handover timeline |
If you stay, the defect protection starts at handover. The builder must fix structural and certain other defects reported within five years, within 30 days, or you're entitled to compensation (MoHUA RERA FAQ).
The site, sheet and sum test (our framework)
Before you decide, run three checks in this order.
- Site. Is the building actually moving? Put the last three or four quarterly progress reports side by side (due within 15 days of each quarter's end under the Karnataka Rules) and visit. Photos that barely change point toward a refund. Here's how to read a quarterly progress report.
- Sheet. Which date governs? Line up the agreement date, the registered date, any Section 6 extension and the Aug 2026 order. Write down the date you'll claim from.
- Sum. Work out both routes in rupees, as in the examples. Set the stay interest against your extra rent and EMI, and the refund against what a similar flat costs now.
If the site is stalled, the sheet is clear and the sum favours leaving, the refund usually wins. If the site is nearly done, staying and claiming interest often makes more sense.
How common are delays in Bengaluru?
Our citywide study of 4,529 approved projects in seven taluks found 67.4% still carry their original RERA completion date, with the rest extended through COVID-era or Section 6 extensions (acre&key analysis of K-RERA data, Oct 2026). For the East specifically, see do East Bengaluru projects deliver on their RERA date. A kept registered date doesn't prove on-time handover, since the register doesn't record actual possession.
How do you file a delayed-possession complaint with K-RERA?
Under Section 31 you can complain to the Authority or the Adjudicating Officer, with the form and fee set by state rules. Compensation goes to the Adjudicating Officer, whom the Authority appoints in consultation with the government (MoHUA RERA FAQ). The steps are in our answer on filing a complaint with K-RERA online.
Before filing, gather:
- [ ] Booking form, allotment letter and registered agreement for sale
- [ ] Every receipt and the bank statements showing payments
- [ ] RERA registration page, extension orders and quarterly reports
- [ ] Every letter and email about the delay
- [ ] Home loan sanction and disbursement letters
- [ ] Your written demand to the builder and any reply
- [ ] Your own interest calculation, payment by payment
The Authority is meant to decide within 60 days of filing, or record why it couldn't (Section 29). In practice it often takes longer. The portal's Search Orders, Project Wise Complaint Report and Default Project List show whether other buyers in your project have filed (K-RERA).
What if the builder doesn't pay after the order?
An order isn't money in your account. The K-RERA portal lists a land revenue recovery certificate list, which points to recovery as arrears of land revenue, but we haven't read the current procedure, so ask your lawyer about enforcement when you file. Taking delay interest and a refund for the same period is double recovery, and an appeal order on the portal shows K-RERA's appellate tribunal dealing with that kind of overlap (K-RERA appellate order).
Who pays the EMI during the delay?
You do. Your loan is a contract with your bank, and the builder's delay doesn't pause it. Keep a record of what you've paid, and if you're taking a refund, talk to the bank early about how the money will close or reduce the loan. Our answer on EMIs during a builder delay covers subvention schemes.
Frequently asked questions
Yes. Under Section 18 of the RERA Act, if the builder fails to hand over possession as agreed, you can withdraw and get back what you've paid, with interest at the prescribed rate, plus compensation. Write to the builder first, keep every paper, and file with K-RERA if it isn't resolved.
Rule 16 of the Karnataka RERA Rules sets it at SBI's highest marginal cost of lending rate plus 2%. On SBI's rates from 15 Oct 2026, the three-year MCLR is 8.95%, which gives 10.95% a year. The rate changes as SBI revises it, so check it for your dates.
It's worked out on the amounts you paid, from the date possession was due to the date of handover or refund, at the Rule 16 rate. As an illustration, ₹60 lakh at 10.95% is about ₹54,750 a month. Actual orders work payment by payment, so your figure will differ.
It might, and that's a legal question. The order added four months to registered completion dates on or after 28 Feb 2026. Section 18 ties delay to the agreement for sale, but builders may cite the extended date. Ask your lawyer which date governs before filing.
If you withdraw, Section 18 provides for a refund with interest and compensation. Compensation claims go to K-RERA's Adjudicating Officer. You can't usually take delay interest and a refund for the same period, as that would be double recovery. Your lawyer will advise what to claim where.
Under Section 31 you complain to the Authority or the Adjudicating Officer, with the form and fee set by state rules. Gather your agreement, receipts, the RERA page and your letters, send a written demand to the builder, then file online with K-RERA.
Section 29 asks the Authority to dispose of complaints within 60 days of filing, or record its reasons for taking longer. In practice it often takes longer, depending on the case and the workload. Plan for that, and keep tracking your loan and rent costs meanwhile.
Not necessarily. In a K-RERA case reported in 2025, a sale deed clause saying the buyers had no further claims didn't defeat their Section 18 claim, partly because they had filed before signing. Facts matter, so file before registration if you can and take legal advice.
Lawyer note: This page is general information, not legal advice. Which date governs, the interest base and enforcement depend on your papers. Consult a property lawyer before you file, sign or settle.
CA note: Interest or compensation you receive may be taxable. Ask a chartered accountant (CA) how it's treated in your case.
Sources
Checked 19 Oct 2026.
- RERA Act 2016, Section 18 (text): https://indiankanoon.org/doc/85848916/
- MoHUA, RERA FAQ (July 2025): https://www.mohua.gov.in/static/uploads/2025/12/542144159b61c980253a694f478d3a5d.pdf
- Karnataka RERA Rules 2017 (rules 16, 17; quarterly updates): https://rera.karnataka.gov.in/resources/staticpage/FinalRERA_Rules-2017.pdf
- SBI, MCLR effective 15 Oct 2026: https://sbi.bank.in/web/interest-rates/interest-rates/mclr
- Karnataka RERA, Order No. K RERA/ADMIN/10/2026, 10 Aug 2026 (notice on https://rera.karnataka.gov.in/))
- Karnataka RERA portal (orders, complaint reports, default list): https://rera.karnataka.gov.in/home?language=en
- K-RERA appellate order (portal copy): https://rera.karnataka.gov.in/download_jc?DOC_ID=R5ZJQ7cGL%2FKFACmVZTuLRQ%3D%3D
- The Economic Times, K-RERA delay-interest order upheld on appeal on 24 Oct 2025 (news): https://economictimes.indiatimes.com/wealth/legal/will/bengaluru-homebuyer-wins-rs-29-lakh-and-interest-compensation-after-builder-delays-flat-possession-by-nearly-4-years/articleshow/125427630.cms
- LiveLaw, K-RERA delay interest up to OC date (news): https://www.livelaw.in/consumer-cases/karnataka-rera-directs-casa-grande-to-pay-interest-for-delayed-possession-310087
- acre&key, Bengaluru RERA completion dates study (K-RERA data, Oct 2026)
