Delay in Delivery of Flats: Compensation Under Tamil Nadu RERA

Buying a home is one of the biggest financial and emotional investments a person makes. When a builder delays handing over the flat, the homebuyer is not just financially burdened but also mentally distressed. To protect the rights of such buyers, the Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted. In Tamil Nadu, the Act is implemented through the Tamil Nadu Real Estate (Regulation and Development) Rules, 2017. This blog post explores what buyers should know if their flat is delayed, what remedies they can seek under Tamil Nadu RERA, and how to proceed legally.

Rights of Flat Buyers Under Tamil Nadu RERA

Under Section 18 of the RERA Act, flat buyers (referred to as “allottees”) have a clear and enforceable right to receive their homes within the time stated in the agreement for sale. If the builder fails to deliver possession:

• The buyer can withdraw from the project and claim a full refund with interest.

• Or, if the buyer chooses to stay invested, they can claim monthly interest for the delay until possession is handed over.

Other rights include:

• Access to updated project progress reports.

• Assurance that 70% of buyer funds are used only for project development (escrow account).

• Right to form a Residents’ Welfare Association after majority possession is granted.

These rights are non-negotiable. Even if the agreement does not provide for compensation, RERA overrides private contracts when enforcing statutory protections.

Legal Remedies Available  Under RERA for Delayed Possession

Tamil Nadu RERA (TNRERA) offers homebuyers the following remedies:

1. Full Refund with Interest

• If the builder fails to deliver possession as per the sale agreement, buyers can claim full refund + interest under Section 18(1)(a).
• The rate of interest is usually SBI’s highest lending rate + 2%, amounting to around 9-10% annually.
• This applies regardless of the builder’s reasons for delay. The law places the burden on developers to deliver on time.

2. Monthly Interest for Delay

• If the buyer stays in the project and waits for possession, the builder must pay monthly interest on the total amount paid by the buyer.
• The interest is calculated from the agreed date of possession till actual handover with occupancy certificate.
• The buyer is compensated for financial strain—like EMIs or rent—caused by the delay.

3. Additional Compensation

Buyers can also claim compensation for:

• Mental harassment and inconvenience

• Loss of rental income or opportunity costs

• Legal costs

Such claims are filed before a RERA Adjudicating Officer (under Section 71) using Form N and a fee of INR 5,000.

Example: In Melvin Victor De Poures v. Poomalai Housing Pvt. Ltd. (2024), the TNRERA ordered:

• Refund the entire amount with interest

• INR 2,00,000 for mental agony

• INR 50,000 for legal costs

This demonstrates how RERA remedies go beyond contracts to uphold justice.

Common Defenses Raised by Builders

Promoters often attempt to justify delays. Common arguments include:

• Force majeure events like natural calamities
• Regulatory approvals delay
• Labor shortages or pandemic impact

However, courts and RERA authorities have held that:

• Only unforeseeable and uncontrollable events qualify as valid excuses.
• If the builder continued to sell units during the alleged force majeure period, their defense is weakened.
• Buyers are not obligated to accept delayed flats if the delay is unreasonable.

Penalties and Enforcement Against Builders

Tamil Nadu RERA has significant powers to enforce buyer rights:

• Section 38: Can impose daily penalties for non-compliance.
• Section 63: Fine of up to 5% of project cost for failure to comply with orders.
• Section 64: Up to 10% penalty or imprisonment if builder ignores refund/interest directions.
• Section 7/8: Registration of project can be revoked in case of major default.

In some cases, TNRERA orders the developer to fast-track completion and submit regular progress reports.

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How to File a Complaint Under Tamil Nadu RERA

If you’re a flat buyer facing delay, here’s how to proceed TNRERA complaint procedures:

1. Collect Documents: Agreement for sale, payment proofs, communications, and any possession date commitments.
2. File Complaint:
   • Refund/interest complaints to TNRERA via Form M.
   • Compensation claims via Form N to the Adjudicating Officer.
3. Pay Filing Fee: Typically INR 1,000 for Form M, INR 5,000 for Form N.
4. Track Hearing and Orders: TNRERA usually schedules hearings and gives speaking orders with timelines.

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Conclusion: Protecting Your Rights as a Homebuyer

Tamil Nadu RERA has transformed how real estate disputes are resolved. Homebuyers now have statutory protections that ensure timely possession or meaningful compensation. With strict penalties, refund and interest rights, and transparent procedures, RERA empowers buyers to hold builders accountable.

If your flat is delayed, act promptly. Understand your rights, collect necessary documents, and approach the TNRERA for justice. The law is on your side—and the system now ensures that developers must deliver on their promises, or pay the price.

For Legal Support: If you need help drafting your RERA complaint or understanding your rights, reach out to a qualified RERA lawyer. Legal guidance ensures your case is presented with clarity and precision.

Disclaimer: This blog post is intended solely for informational purposes and aims to empower homebuyers by sharing legal insights and real case precedents. It should not be construed as legal advice. Readers are strongly advised to consult a qualified and competent lawyer for guidance specific to their individual situations.