On what basis the calculation on delayed payment is calculated?


Section 18 of RERA permits the allottee to get interest at the prescribed rate for every month of delay on his amount.

The rate of interest is prescribed under rules which is 2% state bank of India’s marginal cost of lending rate.

In an unprecedented case, Maharashtra Real Estate Regulatory Authority (MahaRERA) has asked a home-buyer to pay a penalty (in the form of interest) to the developer for delay in payment.

This judgement stands out in stark contrast since the Authority usually has to issue directives to developers to pay penalties to home-buyers for delayed possession.

In August 2019, the home-buyer Ms Suvarna Nazrekar had signed an agreement with the developer for an under-construction apartment in Pune.
However, the home-buyer had not made any payment despite several demand letters between August and December 2019.

The developer SMP Namrata Associates filed a complaint in MahaRERA against a home buyer for not making payment.

Further, beyond certain time, default in payment can lead to cancellation of Agreement of Sale and also forfeiture of advance payment in part or full.

The interest shall be calculated on the unpaid amount for the period of 1month at the rate mentioned as per the RERA act.

Reference: Section 18 of real Estate of Regulatory Authority



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