Is it permissible to claim compensation for damages resulting from the delayed handover of a villa, or to annul the contract because the penalty clause is insufficient to cover the anticipated losses?

The preponderant view is that penalty clauses are permissible in such works and contracts. The aggrieved party has the right to claim it when the other party breaches the contract and delays the work, but does not have the right to claim compensation for damages. A lease contract is binding on both parties and cannot be revoked except for a legitimate excuse. The mere fear of the contractor's delay and the resulting losses does not justify revoking the contract. Both parties must fulfill the terms of the contract, for Allah Almighty says: "O you who have believed, fulfill [all] contracts," and the Prophet, peace and blessings be upon him, said: "Muslims are bound by their stipulations."