How to Cancel a Flat Booking and Get a Refund Under RERA: Sections 18 and 19 Explained

Kaustav Chowdhury
3 days ago
4 min read

Cancelling a flat booking and obtaining a refund from a builder is one of the most common real estate disputes in India. The Real Estate (Regulation and Development) Act, 2016 (RERA) provides a structured framework for both buyer-initiated and builder-default cancellations, with specific provisions under Sections 18 and 19 that protect homebuyer rights. This guide explains the grounds for cancellation, the refund entitlements, the RERA complaint process, and the practical steps to recover your money. For a step-by-step RERA complaint guide, see How to File a RERA Complaint Against a Builder in India: Step by Step.

When Can You Cancel a Flat Booking Under RERA

RERA provides homebuyers the right to cancel their booking and seek a refund in several situations. Under Section 18(1), if the promoter fails to complete the project or is unable to give possession by the date specified in the agreement for sale, the allottee is entitled to withdraw from the project and claim a full refund of the amount paid, along with interest at the prescribed rate. Under Section 18(2), if the promoter fails to comply with the terms of the agreement, or if there are structural defects or poor quality of construction, the buyer can seek compensation or withdrawal. Under Section 19(4), the allottee is entitled to obtain information relating to the sanctioned plans, layout plans, and specifications approved by the competent authority. If these differ materially from what was promised, the buyer has grounds for cancellation.

Section 18: Refund Rights on Builder Default

Section 18 of RERA is the primary provision protecting homebuyers against delayed or failed projects. Section 18(1) provides that if the promoter fails to complete or is unable to give possession of an apartment, plot, or building by the date specified in the agreement for sale or as further extended by the authority, the promoter shall, at the option of the allottee, either (a) return the amount received with interest at such rate as may be prescribed, or (b) continue in the project and be paid interest for every month of delay until possession is delivered. The interest rate is prescribed by the respective State RERA rules and typically ranges from SBI MCLR plus 2 per cent to the State Bank's highest marginal cost of lending rate plus 2 per cent. For more on homebuyer protections, see RERA 2.0 in 2026: Enhanced Homebuyer Protections with Escrow Audits and Digital Transparency.

Section 19: Buyer Obligations and Rights

Section 19 of RERA sets out the rights and duties of allottees. Under Section 19(3), the allottee is entitled to claim the possession of the apartment as per the agreement. Under Section 19(4), the allottee has the right to obtain information about the project from the promoter. Under Section 19(6), every allottee shall make necessary payments within the time specified in the agreement. Under Section 19(7), the allottee shall participate towards the registration of the conveyance deed. Importantly, Section 19(4) read with Section 14 requires that any changes to the sanctioned plans must be made only with the consent of at least two-thirds of the allottees. Unauthorised changes by the builder give the buyer grounds for withdrawal and refund.

Step-by-Step Process for Cancellation and Refund

Step 1: Send a formal written notice to the builder requesting cancellation and refund. The notice should cite the specific grounds (delay, deviation from plans, defect, etc.) and refer to the relevant Section of RERA. Step 2: If the builder does not respond or refuses the refund within 30 days, file a complaint with the RERA Authority in the state where the project is registered. Step 3: The RERA complaint can be filed online through the state RERA portal. The complaint fee varies by state; in Maharashtra it is Rs 5,000 and in UP it is Rs 1,000. Step 4: Attach all supporting documents: agreement for sale, payment receipts, correspondence with the builder, possession date, and evidence of delay or deviation. Step 5: The RERA Authority will issue notice to the builder and schedule a hearing. Step 6: If the RERA Authority rules in your favour, it will direct the builder to refund the amount with interest. Step 7: If the builder fails to comply with the RERA order, you can file an execution application or approach the RERA Appellate Tribunal. For a broader understanding of stalled project issues, see Supreme Court on Stalled Real Estate Projects: Protecting Homebuyer Rights in 2026.

What If the Buyer Wants to Cancel Voluntarily

If the buyer wishes to cancel voluntarily (not due to builder default), the terms of the agreement for sale govern the refund. Under RERA, the agreement for sale must specify the terms of cancellation and the amount of booking amount that may be forfeited. The Supreme Court and various High Courts have held that the builder cannot forfeit the entire amount; typically, the forfeiture is limited to 10 per cent of the basic sale consideration or the earnest money, whichever is lower. The remaining amount must be refunded. Section 19(6) and (7) require the buyer to fulfil payment obligations, but the builder cannot impose unreasonable forfeiture clauses. For help recovering security deposits, see How to Recover Your Security Deposit from a Landlord in India: Rights and Legal Steps.

Key Takeaways

First, Section 18 of RERA entitles buyers to a full refund with interest if the builder fails to deliver possession by the agreed date. Second, the interest rate is typically SBI MCLR plus 2 per cent, as prescribed by state RERA rules. Third, buyers can file complaints with the state RERA Authority online; fees range from Rs 1,000 to Rs 5,000 by state. Fourth, for voluntary cancellation, the builder can forfeit only a reasonable portion of the booking amount, typically not exceeding 10 per cent of the sale consideration. Fifth, if the builder does not comply with the RERA order, the buyer can approach the RERA Appellate Tribunal or seek execution through the civil courts.