Section 18 of the Maharashtra RERA 2016 mandates that if a promoter fails to deliver possession by the promised completion date, they must pay interest to the allottee. This is not optional compensation. It is a statutory liability that triggers automatically once the contractual possession deadline passes.
The interest rate is fixed by regulation: State Bank of India's Marginal Cost of Funds Based Lending Rate (SBI MCLR) plus 2 percentage points per annum. This formula applies to all delayed possession cases across Maharashtra, regardless of project size, location, or builder reputation. The rate adjusts quarterly as SBI MCLR changes, which means your calculations must reference the correct MCLR figure for the period in question.
Liability begins from the date promised in the agreement. If the agreement says possession will be delivered on 31 December 2024 and it arrives on 15 March 2026, interest accrues for 15 months and 15 days from 1 January 2025 onwards. No grace period exists. No partial completion concession applies. You must communicate this clearly to clients before they sign, and again when delays become apparent.
The calculation has three moving parts: the amount on which interest applies, the rate itself, and the period.
Amount: This is the amount paid by the allottee up to the promised completion date. If a buyer has paid Rs. 50 lakhs by the deadline and is waiting for possession, that Rs. 50 lakhs is the base. If they pay additional amounts after the deadline, interest accrues on those amounts from their respective payment dates.
Rate: You must locate the SBI MCLR for the quarter in which the delay begins, then add 2%. For example, if SBI MCLR was 6.50% in Q4 2024-25, the applicable rate is 8.50% per annum. This rate remains fixed for each quarter; it does not change mid-quarter.
Period: Count from the day after the promised completion date to the date possession is actually offered (or the date of the order, whichever applies in a legal proceeding). Use 365 days as the year for simplicity in calculations. Recent MahaRERA orders apply this method consistently, so agents must follow it to advise clients accurately. Use the RERA delay interest calculator to verify manual calculations and show clients exact figures.
A buyer has paid Rs. 75 lakhs by the promised completion date of 15 March 2025. The builder delays possession and it is finally offered on 15 March 2026.
Amount: Rs. 75,00,000 Delay period: 365 days (15 March 2025 to 15 March 2026) SBI MCLR for Q4 2024-25: 6.50% (assumed) Applicable rate: 6.50% + 2% = 8.50% per annum Interest calculation: (75,00,000 × 8.50 × 365) / (100 × 365) = Rs. 6,37,500
The builder owes Rs. 6,37,500 in interest for that one year. This is money the buyer is entitled to recover immediately upon taking possession. If the builder does not pay voluntarily, the buyer can file a complaint with MahaRERA under Section 31. The amount is not negotiable, not dependent on the buyer's hardship, and not subject to builder claims about cost overruns or construction delays.
Consider the same buyer with the same Rs. 75 lakhs, but possession is delayed until 15 March 2027 instead.
If SBI MCLR remains 6.50% for the entire period (simplifying), the calculation for two years is: (75,00,000 × 8.50 × 730) / (100 × 365) = Rs. 12,75,000.
Notice the liability has nearly doubled. However, if SBI MCLR changes mid-way (for instance, it rises to 7.00% in Q4 2025-26), you must break the calculation into quarters. Year 1 remains at 8.50%; Year 2 uses 9.00% (7.00% + 2%). The cumulative interest will exceed Rs. 12,75,000.
For agents advising buyers on multi-year delayed projects, this compounding effect is critical. A two-year delay is not twice as expensive as a one-year delay; it is worse due to the interest accrual. When presenting these figures to clients, emphasize that the builder's delay directly translates into measurable financial recovery—this shifts the conversation from complaint to entitlement.
The Paranjape and Pinnacle Vastunirman MahaRERA orders from April 2026 confirm that Section 18 interest is mandatory and non-negotiable. Both builders argued that external factors (supply chain disruption, labour shortages, regulatory delays) justified exemption or reduction. MahaRERA rejected these arguments entirely. The orders state clearly: delay is delay, and interest accrues regardless of cause.
These orders also clarify that interest continues to accrue until the date of actual possession, not the date the buyer formally files a complaint or initiates proceedings. This matters when calculating claims months after delayed possession begins. The Bombay High Court has upheld MahaRERA's enforcement of Section 18, adding judicial weight to these orders.
For agents, this means you cannot tell clients that delays might be forgiven or reduced based on builder explanations. The regulation is absolute. When a builder claims external circumstances justify the delay, your response must be: the law does not distinguish between circumstances. Interest accrues from day one.
Section 18 now includes a 60-day timeline mandate in recent MahaRERA circulars. Once a builder offers possession, they must compute and pay accrued interest within 60 days, or the allottee can initiate recovery proceedings without further notice.
If a builder pays late (beyond 60 days), additional penalties may apply under Section 59 and 60 of RERA. Agents must advise clients to formally document the possession offer date in writing. A WhatsApp message or verbal communication is insufficient. Request a possession letter with date and time, signed by the builder's authorized representative.
If the builder refuses to pay interest after 60 days, file a complaint with MahaRERA or initiate a recovery warrant application with the district court. The recovery process is faster than civil litigation and does not require the buyer to hire a lawyer; MahaRERA can issue the notice on the buyer's behalf. This remedy gives buyers genuine teeth, and builders know it. Your job as an agent is to ensure clients understand this timeline and document the delay properly from the start.
Before a buyer signs an agreement, you must disclose in writing that Section 18 interest will apply if possession is delayed beyond the promised date. This is not optional. If the project already shows signs of delay (missed intermediate milestones, structural delays flagged in MahaRERA filings), you must specifically highlight this risk.
When advising on ongoing delayed projects, explain the Section 18 interest calculation method clearly. Show the buyer what one year of delay will cost them financially, using the delay interest calculator if available. Provide them with the current SBI MCLR rate and the applicable 8.50%+ rate in writing. Avoid vague language like "you may be entitled to interest." Use definitive language: "You will receive interest at 8.50% per annum from the promised completion date."
Document your disclosure in your agency file. If the buyer later claims they were unaware of Section 18 interest liability, you have written evidence that you explained it. This protects you from complaints to the MahaRERA Agent Authority and potential suspension of your registration.
When a buyer files for delayed possession interest, builders sometimes refuse to pay and instead file counter-claims or delay tactics in court. Agents should prepare clients for this likelihood. Explain that a recovery warrant is a tool the district court issues to attach and liquidate the builder's assets if they refuse to pay the ordered interest.
This is not a threat; it is how the law works. Builders understand recovery warrants carry serious consequences—bank accounts frozen, property attachments—so many prefer to settle. When you present the recovery warrant mechanism to a buyer as a realistic outcome, you reframe their position from "I hope the builder pays" to "I have a legal mechanism to force payment."
Advise buyers to keep all payment receipts, the signed agreement, and possession offer communications. These documents are essential for recovery proceedings. If a builder offers a discounted settlement of interest owed, the buyer should understand they are negotiating from a position of legal strength, not weakness. Your role is to clarify that strength so the buyer makes informed decisions about settlement negotiations.
Section 18 questions on the MahaRERA agent exam test your ability to calculate interest, identify when liability attaches, and advise clients on their rights. The exam expects you to know that interest is SBI MCLR plus 2%, that it accrues from the promised completion date (not the filing date), and that builders cannot escape this liability through force majeure or cost overrun arguments.
Practice working through delay interest calculations with different MCLR rates and different delay periods. The practice test section includes scenario-based questions where you calculate interest for real project delays. Review the exam pattern to understand the weighting of RERA sections; Section 18 typically carries 5-8% of the total marks.
Take a full-length mock test under exam conditions to test your accuracy on interest calculations under time pressure. Real exams include multiple-choice questions where one wrong word in your answer can mark it incorrect (e.g., "interest accrues from the promised date" versus "from when the buyer files a complaint"). Precision matters.
Adaptive mock tests · 900+ questions · Same 40-minute format as the real IBPS exam
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