If a real estate project fails, stops completely, or gets delayed forever, you are legally entitled to get back 100% of your booking amount along with interest and compensation. Under Section 18 of the RERA Act, if a builder fails to complete the construction or hand over the keys on time, you have every right to take your money back. In such cases, the builder must refund all the money you paid—including your initial token or booking amount—plus extra interest. This interest is calculated using State Bank of India's lending rate (SBI MCLR) plus 2%, counting from the day you paid the money until you get it back.
Years ago, if a project got stuck, buyers had a tough time getting their money back. But since RERA came into picture in 2016, the rules have changed in favor of home buyers.
RERA Section 18 gives you two clear choices if a builder fails to deliver:
To stop builders from spending your money elsewhere, RERA strictly says that 70% of all money collected from buyers must go into a separate bank account (called an escrow account). Builders can only withdraw this money as construction moves forward on site.
Under RERA Section 13, no builder can ask for or accept more than 10% of the total property cost as an advance or booking amount before signing a registered Sale Agreement.
If a project shuts down and the builder makes excuses instead of returning your money, you can take legal action through three main channels:
| Legal Authority | Action Required | Key Outcome / Benefit |
|---|---|---|
| State RERA Authority | File an online complaint under Section 31 | Direct court order to get your full refund with interest (SBI MCLR + 2%). |
| Consumer Forum (NCDRC/SDRC) | File a case for "Deficiency of Service" | Refund plus extra money for mental stress and legal costs. |
| Insolvency Court (NCLT / IBC) | File a petition if the builder goes bankrupt | Home buyers get treated as Financial Creditors to recover money from sold assets. |
The reason behind leaving a project decides whether you get all your money back or face deductions.
| Scenario | Main Reason | Refund Rights | Any Deductions? |
|---|---|---|---|
| Project Failure (Builder's Fault) | Construction stopped, lost government permissions, missed deadline. | 100% Refund + Bank Interest | No deductions allowed. |
| Voluntary Exit (Your Choice) | You changed your mind or faced personal money issues. | Remaining money returned in 30–45 days | Small cancellation fee (usually 1% to 2% of total cost). |
Even though the law is on your side, avoiding risky projects saves you time and headaches.
No. If the project fails because of the builder's fault, delayed work, or missing approvals, they cannot cut any administrative or cancellation charges. You get a 100% refund.
As per RERA rules, you get an interest rate calculated as SBI's highest Marginal Cost of Lending Rate (MCLR) + 2% per year. This interest applies from the exact date you paid the money.
When RERA issues an order for a refund, builders are generally given 60 to 90 days to return the complete amount along with the calculated interest.
If you took a home loan for the flat, the refunded money from the builder goes straight to your bank first to close your loan balance. Any leftover money after closing the loan comes to you.
If the builder goes bankrupt, home buyers can approach the NCLT court together. Under Indian law, buyers are recognized as financial creditors, which helps them claim their money back through company asset sales.
If you decide to cancel on your own without any default from the builder's side, the builder can keep a small fee (usually 1% to 2% of property cost) as stated in your agreement and return the rest.
No, it is risky. RERA law clearly forbids builders from taking booking money before getting an official RERA registration number. Always verify the project's RERA ID first.
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