'Builder is always bound to pay compensation for delay'

If the builder does not deliver the flat to the home buyer as per agreed timelines what relief does RERA offer? What action can be taken against the builder?

- Shirish V Deshpande

Ashish Taskar, Thane RERA has established that time is of the essence in agreements for sale, requiring both the builder (promoter) and homebuyer (allottee) to adhere to agreed timelines. If the homebuyer delays installment payments, they must pay interest on the defaulted amount at the prescribed rate. Conversely, if the promoter fails to deliver possession on time, the homebuyer has two options: withdraw from the project or continue despite the delay.

In case of withdrawal due to delay, section 18(1) mandates that the promoter refund the entire amount paid by the homebuyer, along with interest at marginal cost of fund-based lending rate (MCLR) + 2% per annum, calculated from the dates the payments were received to the date of refund.

Additionally, the promoter must compensate for losses incurred by the homebuyer. Section 19(4) reinforces the homebuyer's right to a full refund with interest and compensation.