Builder delayed possession of your flat: refund, interest and compensation in Tamil Nadu

Check these first

• The possession date in the agreement for sale, and any grace period
• The clauses on delay, force majeure and compensation
• Whether the project is registered with TNRERA, and the completion date declared there. You can search on the TNRERA portal.
• Your payment receipts, the builder’s demand letters, and any letters about delay
• Whether you have a home loan, and the terms on which the bank pays the builder

Your rights under RERA

Section 18 of the Real Estate (Regulation and Development) Act, 2016 gives a buyer two choices when the builder fails to complete the project or give possession as agreed:

• Withdraw from the project and get back the amount paid, with interest at the rate prescribed under the Tamil Nadu rules, and compensation; or
• Stay in the project and get interest for every month of delay until possession is handed over.

Registration with RERA is required for most projects, including plotted layouts, unless the land is 500 square metres or less, or the project has eight units or fewer.

Complaining to TNRERA

Complaints are filed online on the TNRERA portal, with a fee. There are separate forms for complaints to the Authority and to its Adjudicating Officer, who decides compensation, so the right form matters. Orders can be appealed to the Tamil Nadu Real Estate Appellate Tribunal within 60 days. A builder who appeals must first deposit at least 30% of any penalty, or the full amount ordered to be paid to the buyer.

Filing a consumer complaint instead

Delay in possession is also a deficiency in service under the Consumer Protection Act, 2019. In Imperia Structures v. Anil Patni (2020), the Supreme Court held that RERA does not bar a consumer complaint, so a buyer can choose either forum. The Commission depends on the amount paid for the flat: the District Commission up to ₹50 lakh, and the State Commission above ₹50 lakh up to ₹2 crore.

The Supreme Court has also held that a buyer cannot be made to wait indefinitely for possession, and that one-sided clauses in a builder-buyer agreement can amount to an unfair trade practice (Pioneer Urban Land and Infrastructure v. Govindan Raghavan, 2019).

Practical points

• Do not stop paying home loan EMIs without advice. Your obligations to the bank continue.
• Where many buyers in the same project face the same delay, one or more of them can file a joint consumer complaint on behalf of all, with the Commission’s permission.
• Keep all correspondence in writing. Phone promises are hard to prove.
• If you take possession, record any defects and the date in writing. Accepting possession does not by itself give up a claim for delay interest.

Common questions