Consumer Connect: 'MahaRERA Confirms Interest Payment For Delay Is Absolute,' Says Expert

Q. I have booked a flat in Mulund, for which the agreement for sale was executed on January 15, 2023. The total cost is Rs1.65 crore. As per the agreement, the possession date is April 30, 2025, with a six-month grace period. Looking at the building’s status, I don’t think the builder can give possession for another year. My queries are: (a) What is the applicable interest rate in case of delay? (b) When does this interest become payable? (c) Is payment automatic, or does the buyer need to demand it? (d) Can the builder deny interest citing reasons beyond his control? —– Neha Kulkarni, Goregaon (West) A.

Your questions concern most homebuyers facing delayed possession. The answers lie in Section 18(1) of RERA, which states, “Where an allottee does not intend to withdraw from the project, he shall be paid by the promoter, interest for every month of delay, till handing over of possession, at such rate as may be prescribed.” In Maharashtra, the interest rate under Rule 18 is SBI’s highest MCLR + 2% per annum. The interest becomes payable soon after the promised possession date and any grace period mentioned in the agreement.

In your case, the agreed possession date is April 30, and with a six-month grace period, it extends to October 31. Hence, the delay period begins November 1, and the builder must pay monthly interest at MCLR + 2% from that date until actual possession with a valid occupancy certificate. Interest for November should thus be paid in the first week of December 2025, and thereafter every month until possession. As per Section 18, payment of interest is automatic, the homebuyer need not demand it. The builder, aware of the agreed possession date, should start paying interest on the entire amount received.

MahaRERA’s FAQs (Q.21) also confirm that this interest must be automatically paid. However, in practice, many buyers are forced to file complaints before MahaRERA to claim their rightful dues. Therefore, buyers should formally call upon builders to begin payment once delay starts and, if they fail to comply, lodge a complaint with MahaRERA. Your concern about builders citing delays ‘beyond their control’ is valid. But the Supreme Court, in the Newtech Promoters case, has clarified that the right to monthly interest for delay is absolute and non-negotiable.

MahaRERA has echoed this in a recent judgment, stating, “If the respondent fails to hand over possession by the specified date, the respondent shall be liable to pay interest to the complainant. This provision does not provide for any waiver, disclaimer, exception, or force majeure. It is an absolute provision.” It is time MahaRERA issues general directions to all promoters to comply with this statutory obligation, preventing homebuyers from repeatedly approaching the authority for an already settled legal right.

(Advocate Shirish V Deshpande is chairman, Mumbai Grahak Panchayat. Queries can be sent to him on email: shirish50@yahoo.com)

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