By Dr. Sanjay Chaturvedi, LLB, PhD
The Real Estate (Regulation and Development) Act 2016, popularly known as RERA, was enacted to safe gaurd the interest of Home buyers in the country and have regulatory frame work for real estate development.
Under section 18, which read as under, there were two options given by the Act to the home buyers. First, come out of the real estate project with principle, interest and all taxes. Second, remain in the project and and demand delay interest from builder.
Let us see the section first which read as:
18(1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building,-
(a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or
(b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under
Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.
(2) The promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land, on which the project is being developed or has been developed, in the manner as provided under this Act, and the claim for compensation under this subsection shall not be barred by limitation provided under any law for the time being in force.
(3) If the promoter fails to discharge any other obligations imposed on him under this Act or the rules or regulations made thereunder or in accordance with the terms and conditions of the agreement for sale, he shall be liable to pay such compensation to the allottees, in the manner as provided under this Act.
The question is how to calculate interest. The rate of interest shall be the interest of SBI MCLR on the date of order ( and not on the date of payment or default) plus 2%. This interest has to be calculated for option one where you want to come out of project, from the date of payment, say since 2012 when apartment was booked. In second option, the delay interest is calculated from the date of default of not giving possession, say possession date in the Agreement for Sale. For getting relief in either of option under this section, complainant need to file complain in Form A with respective RERA Authority of the state.
Mind you interest and compensation are two different concept. Any thing which is not interest, is compensation. Compensation like Rent, damages, hardship etc can only be adjudicated by Adjudication Officer under Section 71 and 72.