What is delayed possession compensation?
Also called: delay interest, DPC, possession delay penalty, Section 18 interest, builder delay compensation
When a builder misses the possession date in the agreement, Section 18 of the RERA Act lets you stay on and receive interest for every month of delay until possession, or withdraw and get your money back with interest and compensation.
The interest rate comes from the state rules, not the agreement. Most states set it at the State Bank of India's highest marginal cost of lending rate (MCLR) plus 2%. Section 2(za) makes the rate symmetrical: what the builder pays you for delay equals what you'd pay the builder for a late instalment. That finished off the old NCR clause that charged buyers 18% on overdue payments while paying them ₹5 per sq ft a month for delay.
Interest runs on the amount you've actually paid, from the promised possession date to the date of a valid offer of possession. A valid offer generally means one made after the OC is in hand. An offer "for fit-outs" without an OC doesn't stop the clock.
If you'd rather leave, the Supreme Court in Newtech Promoters (2021) called the refund right unconditional where the builder fails to deliver on time. You don't have to prove a loss. Compensation beyond interest, for rent paid or mental agony, is for the adjudicating officer under Section 71.
Builders often adjust delay interest against the final demand instead of paying cash. That's fine if the arithmetic holds. Ask for the calculation sheet, check each payment date and the rate used, and don't sign a "no claims" undertaking in the possession paperwork that gives up the balance.
A buyer in Noida's Sector 137 had paid ₹72 lakh by June 2022 for a flat promised in December 2022. Possession with an OC arrives in December 2025. At an assumed rate of 10.85% simple interest, 36 months of delay works out to about ₹23.4 lakh.
Signing an indemnity or "full and final settlement" at handover to get the keys. That's where many buyers quietly give up their delay interest.
Questions people ask about delayed possession compensation
Can I claim delay interest after taking possession?
Yes, as long as you've not signed it away. The authority can award interest for the delay period after handover, but a signed settlement makes it much harder.
What rate applies to delay interest?
The rate in your state's RERA rules, usually SBI's highest MCLR plus 2%, not whatever figure the agreement mentions.