East Bengaluru buyer answers
Can I cancel a flat booking and get my money back under RERA?
Direct answer: It depends who cancelled and why. If the builder misses the agreement handover date, section 18 lets you withdraw for a refund with prescribed interest, or stay and claim delay interest. If you cancel for your own reasons, the Act gives no general exit right; your agreement and booking terms control deductions.
Disclosure: acre&key’s advice is free to buyers; we are an authorised sales partner for some projects and may be paid by the developer.
Verify with your lawyer: This page is general guidance from the RERA Act and related public sources, not legal advice. Have your own property lawyer read your allotment letter, agreement for sale and payment receipts before you cancel, pay or file anything.
A job change, a loan snag or a long construction delay can all leave you asking the same thing: can I walk away and get my money back? Under the Real Estate (Regulation and Development) Act, 2016, the answer splits into two tracks. One is when the promoter is in default. The other is when you want out for reasons of your own.
When does section 18 give me a refund?
Section 18(1) applies if the promoter fails to complete or is unable to give possession:
- in accordance with the agreement for sale, or by the date specified in it; or
- because the promoter's business has stopped after suspension or revocation of registration, or for any other reason
In those cases, if you wish to withdraw from the project, the promoter must return the amount received for that apartment "with interest at such rate as may be prescribed" and compensation in the manner provided under the Act (s.18(1)).
If you do not want to withdraw, the proviso says the promoter must pay you interest for every month of delay until possession, at the prescribed rate.
Section 19(4) restates the allottee's right to claim that refund with interest and compensation when the promoter fails to give possession as agreed or after registration is suspended or revoked (s.19(4)).
So a builder-side delay past the agreement date is not a dead end. You choose: exit with refund plus interest, or stay and claim monthly delay interest. That choice is yours to make with your lawyer, not the sales team's. If you stay and your home-loan EMIs keep running, here is who bears the interest during a builder delay.
What is the "prescribed" interest rate in Karnataka?
Karnataka RERA's published FAQ states that the rate payable by the promoter to the allottee, or by the allottee to the promoter, "shall be the State Bank of India highest marginal cost of lending rate plus two percent" (Karnataka RERA FAQ, Q8). Confirm the current SBI MCLR figure and the rule text with your lawyer before you settle a figure; this page does not quote a rupee rate.
What if I want to cancel because my plans changed?
The Act does not create a general, no-fault right for a buyer to cancel and take a full refund. Buyer-initiated exits sit mainly in:
- The agreement for sale (and any earlier allotment or booking form it incorporates)
- Any mutual settlement you negotiate with the promoter
- Narrow statutory paths such as section 12 (false advertisement or prospectus) where you sustained loss and intend to withdraw
Section 11(5) limits the promoter's power to cancel your allotment: the promoter may cancel "only in terms of the agreement for sale". If a cancellation is unilateral, not in accordance with the agreement, and without sufficient cause, you may approach the Authority for relief (s.11(5)).
That protects you from an arbitrary builder cancellation. It does not, by itself, force a full refund when you cancel for personal reasons. Read the forfeiture, deduction and refund clauses in your agreement carefully before you write a cancellation letter.
How does a false brochure change things?
Section 12 covers loss from an incorrect or false statement in a notice, advertisement, prospectus or model apartment. The promoter must compensate you. If you intend to withdraw because of that false statement, you are to be returned your entire investment with prescribed interest and compensation (s.12).
Keep the brochure, WhatsApp pitch, email and model-flat photos. Dates and exact wording matter. This route is about misrepresentation, not buyer's remorse.
Booking amount vs registered agreement: why it matters
Section 13(1) bars the promoter from taking more than ten per cent of the cost as advance or application fee without a written, registered agreement for sale (s.13). If you have only paid a small booking amount and there is no registered agreement yet, your exit terms sit in whatever booking form you signed. Once the agreement is registered, both sides are bound by that schedule, including cancellation and forfeiture language.
Do not assume an oral "full refund anytime" promise overrides the written form. Ask for the cancellation clause in writing before you book.
What about my home loan if I withdraw?
Your RERA claim against the promoter and your loan contract with the bank are separate. If tranches were already disbursed, the bank will still look to you under the loan agreement until the account is closed as the bank requires. Coordinate refund routing with the bank so any promoter refund clears the outstanding first where the bank has a charge. Our note on how under-construction home-loan disbursement works explains why pre-EMI can continue even when construction stalls.
Practical sequence before you cancel
- Pull the registered agreement for sale (or booking form if none yet) and mark the possession date, cancellation clause and forfeiture percentages.
- Check the project page on rera.karnataka.gov.in for the declared completion period and any extension (how to check a project on the Karnataka RERA website).
- Decide whether your facts fit section 18 (builder default), section 12 (false advertisement) or a buyer-initiated exit under the agreement.
- Write to the promoter with dates, amounts paid and the relief you seek. Keep proof of delivery.
- If talks fail, consider a complaint under section 31; here is how to file a complaint with Karnataka RERA.
- Tell your lender in writing if a loan is live.
What this page will not tell you
It will not quote a "usual" forfeiture percentage, a fixed processing time for refunds, or a guaranteed outcome at Karnataka RERA. Those turn on your documents, the Authority's orders and your facts. Your lawyer maps the Act to your file.
Frequently asked questions
Can I cancel within a cooling-off period after booking?
The RERA Act does not set a universal cooling-off window for flat bookings. Any short cancellation window, if it exists, comes from your booking form or agreement, not from a general Act clause.
If the builder cancels my allotment, do I automatically get a full refund?
Not automatically. Section 11(5) lets you seek relief if the cancellation was not in terms of the agreement and was unilateral without sufficient cause. The refund amount still follows the agreement and any order the Authority passes.
Does paying only the booking amount make a refund easier?
The amount at stake is smaller, but the written booking terms still decide what comes back. Section 13 also limits how much the promoter can take before a registered agreement exists.
Will delay interest continue if I stay in the project?
Under the proviso to section 18(1), if you do not withdraw, the promoter must pay interest for every month of delay until possession, at the prescribed rate. Confirm calculation and start date with your lawyer.
Should I stop paying instalments when I decide to cancel?
Stopping payment can put you in breach under section 19(6)–(7) while your exit is still unsettled. Take advice before you skip a demand.
References
- Real Estate (Regulation and Development) Act, 2016, ss. 11(5), 12, 13, 18, 19(4), 19(6)–(7), 31. https://rera.karnataka.gov.in/resources/staticpage/Real_Estate_Act.pdf, accessed 17 Oct 2026.
- Karnataka RERA FAQs, Q8 (rate of interest: SBI highest MCLR plus two percent). https://rera.karnataka.gov.in/resources/staticpage/KARNATKA_FAQs.pdf, accessed 17 Oct 2026.
- Karnataka RERA portal. https://rera.karnataka.gov.in, accessed 17 Oct 2026.