MahaRERA Significant Ruling on Booking Amount Refund
In a significant judgment, an appellate tribunal has directed a real estate developer to refund the booking amount it had forfeited from a homebuyer, saying that some key clauses in the allotment letter did not conform to applicable laws. Homebuyers across the country have been voicing their concerns over disadvantages they face due to agreements skewed in developers’ favour. Apart from forfeiture of booking amount, complaints over penal charges levied by developers, including interest for delayed payment or default, have also been raised by them. This verdict will prompt RERA authorities across the country to follow the provisions of the RERA Act and reconsider their decision of not allowing refunds. This is a big relief for homebuyers and deter builders from taking advantage. Maharashtra Real Estate Appellate Tribunal set aside a Maharashtra Real Estate Authority, saying the forfeiture of booking amount is unfair due to one-sided clauses customers are forced to sign by the builders. The matter relates to the booking of an apartment in realty developer Omkar Ventures’ project in Andheri, Mumbai. The tribunal in its ruling on June 29 stated that the terms specified in application form and allotment letter issued to the homebuyer do not conform to the provisions of the Real Estate (Regulation and Development) Act, 2016 and they are also “ambiguous, one-sided and inequitable”. “It is rather difficult for an allottee of common intellect and not familiar with the terminology used in real estate sector to comprehend implications of such terms used in contractual transactions executed in the form of booking application form/allotment letter,” it said. Both the parties executed a letter of allotment in December 2017 following which a demand notice was also issued to the homebuyer by the developer to pay the next instalment. However, the homebuyer could not procure a loan from banks she requested the developer to cancel the booking and refund the amount already paid. The developer argued that the homebuyer had failed to a certain clause of the allotment letter that states an amount equivalent to 10% of consideration can be forfeited on cancellation. And based on this clause, the developer had forfeited only 5% amount paid by the homebuyer. The appellate tribunal’s ruling could have an impact on many such disputes between builders and homebuyers. Homebuyers across the country have been voicing their concerns over disadvantages they face due to agreements skewed in developers’ favour.
Tags : News/Views Latest News Real Estate homebuyers MahaRERA developer Refund appellate tribunal