Consumer Connect: Is 18-Month Grace Period Legal In RERA-Linked Flat Possession Delays?

Q. My friend has booked a 2-BHK flat in Kandivali with a reputed builder. The agreement for sale was registered on April 15, 2024 and the promised date of possession was December 31, 2025. He has paid almost 90% of the flat price of Rs2.50 crore, but the flat is not ready for possession. When he called upon the builder to pay interest per month for delay from January 1, 2026, the builder refused, relying on an 18-month grace period beyond December 31, 2025 provided in the agreement. From which date does the delay period begin for payment of interest to homebuyers? Is it from the date specified in the agreement or after the grace period? Is there any maximum limit for grace period prescribed in RERA? Is a grace period of 18 months fair and legal? —Alok Hardikar, Vile Parle (East)

A. Your question raises the issue whether the builder can rely on an 18-month “grace period” clause in the agreement for sale to deny payment of interest for delay in possession. According to section 18(1) of RERA, if the promoter fails to hand over possession by the date specified in the agreement for sale, the allottee is entitled to interest for every month of delay at the prescribed rate, or refund with interest if possession is not taken. Section 11(4)(a) says the promoter is bound by representations made in the agreement.

Section 9 of the Maharashtra Ownership Flats Act (MOFA) had provided for two extensions of three months each beyond the possession date specified in the agreement, “for reasons beyond control of the promoter or his agents”. However, under RERA, there is no such statutory extension beyond the possession date specified in the agreement for sale.

As per Clause 6 of the Model Agreement under RERA, the promoter is entitled to reasonable extension of time if completion is delayed due to war, civil commotion, act of God, or any notice, order, rule or notification of the Government and/or other public or competent authority/court.

In your friend’s case, none of the above reasons mentioned in the RERA Model Agreement exist to justify the delay. His agreement contains a clause of “reasons beyond control of the promoter” to extend the possession date. This clause in any post-RERA agreement for sale, in my opinion, cannot be sustained and is liable to be struck down.

Further, no promoter or builder can provide an 18- month grace period beyond the date of possession specified in the agreement for sale. This is bound to be held contrary to the letter and spirit of RERA. The 18- month grace period is unreasonable, arbitrary and unfair, and defeats the spirit of RERA, which aims to protect homebuyers.

In my opinion, your friend should challenge the builder’s decision denying him rightful interest for the delay period, which commenced from January 1, this year. He should also challenge the 18-month grace period clause as arbitrary, unreasonable, unfair and contrary to RERA.

Your friend may file his case either before MahaRERA authority or before the appropriate consumer commission. Since he has paid total consideration exceeding Rs2 crore, if he opts for the consumer commission, it will have to be before the National Consumer Disputes Redressal Commission in Delhi.

(Advocate Shirish V Deshpande is chairman, Mumbai Grahak Panchayat. Queries can be sent to him on email: shirish50@yahoo.com)

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Published on: Monday, June 15, 2026, 10:57 AM IST