Real Estate

Legal Notice to Builder for Delay and Refund under RERA Format

A RERA refund notice is a written demand asking a builder to return everything you paid for a delayed or misdescribed flat, with interest and compensation. Section 18 of the Real Estate (Regulation and Development) Act, 2016 gives you this right when possession is not given by the agreed date. If the builder ignores it, you can complain to the State RERA.

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When to send this notice

Use this notice when you want to leave the project and get your money back, not wait for possession. Typical triggers are a missed possession date in the agreement for sale, a revoked registration, or a brochure or advertisement that turned out to be false. If you would rather stay and claim monthly delay interest, use the delayed possession notice instead. A notice is not a legal pre-condition for a RERA complaint, but it creates a dated record and often prompts a settlement.

Statutory basis

Section 18(1) of the Real Estate (Regulation and Development) Act, 2016 makes the promoter liable, on demand, to return the amount received with interest at the prescribed rate, together with compensation, if the allottee wishes to withdraw because the promoter fails to give possession by the date in the agreement for sale, or cannot do so because registration has been suspended or revoked. If the allottee does not withdraw, the promoter must pay interest for every month of delay until possession. Section 18(2) provides compensation for defective title. Section 12 entitles an allottee who suffers loss because of an incorrect or false statement in an advertisement, prospectus or brochure to compensation, or to withdraw and receive the investment back with interest and compensation. Section 19(4) repeats the allottee’s right to refund with interest and compensation. A complaint can be filed before the State Real Estate Regulatory Authority or the adjudicating officer under Section 31, and the adjudicating officer decides compensation under Section 71. The interest rate is set by the State RERA Rules and is commonly the State Bank of India’s highest marginal cost of lending rate plus 2 per cent. The Supreme Court held in Newtech Promoters and Developers v. State of U.P. (2021) that the refund right under Sections 18(1) and 19(4) is unconditional, and in Imperia Structures v. Anil Patni (2020) that RERA does not bar a consumer complaint for the same default.

This format is a general drafting aid, not legal advice. Statutory timelines and wording vary by facts and jurisdiction — have it reviewed by a qualified advocate before you send it.
Copy-ready notice format
[ON THE LETTERHEAD OF THE ADVOCATE / ALLOTTEE]

By Registered Post A/D & Email

Date: [DD/MM/YYYY]

To,
[Name of Promoter / Builder Company]
[Registered Office Address]
[RERA Registration No. of the Project: ___]

Subject: Notice under Section 18 of the Real Estate (Regulation and Development) Act, 2016 demanding refund of Rs. [Amount] with interest and compensation for Unit No. [___], [Project Name].

Sir/Madam,

Under instructions from my client, [Allottee Name], of [Address] ("my client"), I serve upon you the following notice:

1. That my client booked Unit No. [___], [Tower/Floor], in your project [Project Name], [Location], and the Agreement for Sale dated [DD/MM/YYYY] was executed for a total consideration of Rs. [Amount].

2. That my client has paid Rs. [Amount] to you up to [DD/MM/YYYY] in instalments as detailed below, supported by receipts and bank statements:
   Date | Amount (Rs.) | Mode and Reference
   [___] | [___] | [___]

3. That under Clause [__] of the Agreement for Sale, possession was to be delivered by [DD/MM/YYYY]. [Even after the extension permitted under the Agreement / RERA registration, if any,] you have failed to complete the project and hand over possession.

[Alternative paragraph for misrepresentation: That my client booked the unit relying on the brochure/advertisement dated [___], which promised [___], but the project does not have the same, contrary to Section 12 of the Act.]

4. That your failure is a default under Section 18(1) of the Act. My client has decided to withdraw from the project and is entitled to refund of the entire amount paid with interest at the rate prescribed under the [State] Real Estate (Regulation and Development) Rules, together with compensation.

5. That by this notice my client demands refund of Rs. [Amount paid] together with interest from the date of each payment until the date of refund, and compensation of Rs. [Amount] for loss and mental agony.

I therefore call upon you to pay the above sums to my client within thirty (30) days of receipt of this notice, failing which my client shall file a complaint before the [State] Real Estate Regulatory Authority and the adjudicating officer under Sections 31 and 71 of the Act and take other proceedings at your risk, cost, and consequences.

[Advocate Name / Allottee Name]
[Enrolment No. / Contact]

Replace every [placeholder] with your own details before use.

How to send this legal notice

From draft to proof of delivery and the next legal step.

  1. Collect the agreement for sale, allotment letter, payment receipts, bank statements, brochure and RERA registration details of the project.

  2. Check the possession date in the agreement and the project’s RERA registration and any extension on the State RERA website.

  3. Calculate the refund: each payment, the date paid and interest at the rate in your State’s RERA Rules.

  4. Draft the notice demanding the full refund with interest and compensation, and stating that you are withdrawing from the project.

  5. Send it by Registered Post A/D and email to the registered office and keep proof of delivery.

  6. If the builder does not pay, file a complaint on the State RERA portal for refund and interest, and before the adjudicating officer for compensation.

Frequently asked questions

Can I get a full refund from a builder under RERA?

Yes. If the builder fails to give possession by the date in the agreement, Section 18(1) lets you withdraw and claim all the money paid with interest and compensation. The Supreme Court has treated this refund right as unconditional.

What interest rate applies to a RERA refund?

The rate is fixed by your State’s RERA Rules, and in most States it is the State Bank of India’s highest marginal cost of lending rate plus 2 per cent. Check the Rules of the State where the project is registered.

Should I go to RERA or the consumer commission?

Both remedies are available for the same default and you can choose one forum. Consumer complaints must be filed within two years of the cause of action, while RERA complaints follow the State Authority’s procedure.

Related notice formats

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