Homebuyers' Options for Delayed Possession

You saved for years for the down payment. You took a home loan. You started paying EMIs. Maybe you planned your move closer to work, your child's school admission or simply looked forward to finally leaving a rented apartment. The building wasn’t ready. The keys never came. But the EMI continued to hit your bank account every month. Across India, thousands of homebuyers are finding themselves trapped in exactly this situation. They are paying for homes they cannot live in while also paying rent, postponing investments and waiting for builders to deliver on promises made years ago. The problem is far bigger than a few delayed projects. According to PropEquity, nearly 2,000 housing projects comprising 5.08 lakh housing units were stalled across 42 cities as of July 2024. That is up from 4.65 lakh stalled units in 2018. More importantly, the problem extends beyond outright stalled projects. PropEquity notes that four out of five under-construction homes that are eventually delivered still face delays of three to four years. The issue is particularly severe in NCR. Greater Noida alone has 74,645 stuck units, while Gurugram has 52,509 units across 158 stalled projects and Noida has 41,438 units across 103 stalled projects. Property consultant Anarock had earlier estimated that 6.29 lakh homes worth Rs 5.05 lakh crore were either severely delayed or stalled across India’s top seven cities. More recently, Anarock Capital estimated that over 4.5 lakh affordable and mid-income homes across more than 1,500 projects remain stalled and require roughly Rs 55,000 crore in funding support to be completed. For affected buyers, the consequences extend well beyond a delayed move. Many find themselves paying both rent and EMI, losing tax benefits, pausing SIPs and dipping into emergency savings while waiting for possession. So what can a homebuyer do when a builder misses the promised possession date? Can you seek compensation? Can you get your money back? Can you stop paying EMIs? Lawyers, home-loan experts and financial advisers say buyers today have more rights than ever before, provided they know how and when to use them. One of the biggest misconceptions among buyers is that they have no option but to keep waiting. Sneha Suresh Agicha, Advocate at D. M. Harish & Co., says the RERA Act fundamentally changed the balance of power between developers and homebuyers. When a builder fails to hand over possession by the date promised in the agreement for sale, the homebuyer acquires several statutory rights. Under Section 18 of the Real Estate (Regulation and Development) Act, 2016, buyers can choose between two options. The first is to withdraw from the project and seek a refund along with interest. The second is to remain in the project and claim interest for every month of delay until possession is finally handed over.