• Flat booking cancellation refund as per new RERA law - Karnataka

Flat booking cancellation refund as per new RERA law
I have booked a flat (Paying Rs 3 Lakhs) in a pre-launch stage in Bangalore on Apr-17 and had an agreement where builder put a clause that if I canceled the flat , they will deduct 10% of the apartment cost. 
The builder had promised to share and execute the sale agreement within 30 days of booking. After multiple followups, they have shared the sale agreement draft in May 2018 (after an year), which is single sided. And they are not ready to incorporate any of our requirements including the ones they promised at the time of booking. 
Now for cancellation builder is charging 10% of property value which is Rs 10,00,000L. No other payment has been made to the builder so far. What are my legal options in this case?. How should i go forward with this issue?
Asked 4 years ago in Property Law
Religion: Hindu

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11 Answers

1) You can make complaints to RERA office and consumer forum of your city. If builder has not full filled your requirements than he not liable to deduct 10% amount of total cost.

2) Check how much construction is completed or flat is at ready possession. Your builder should follow RERA norms accordingly.

Ganesh Kadam
Advocate, Pune
12335 Answers
191 Consultations

4.9 on 5.0

1) if you cancel the booking you would not get refund of money paid by you

2) you have agreed that in event of cancellation of booking builder shall deduct 10 per cent of apartment cost

3)dont cancel the booking as your chances of obtaining refund are bleak

4) (1) For the purpose of sub-section (2) of section 13, the

agreement for sale shall be in the form as per Annexure ‘A’.. builder has to execute agreement as per said format

5) Section 13 of RERA says that a promoter has to make an agreement if he accepts more than 10 per cent,of sale price from the purchaser of flat

Ajay Sethi
Advocate, Mumbai
87899 Answers
6207 Consultations

5.0 on 5.0

1. if the sale agreement is not as per RERA format then it is not binding on you

2. if you cancel the booking then builder can forfeit 10% of sale price as stated in agreement

3. what are the things you want to be incorporated in the sale agreement?

4. the builder will be bound by the date mentioned in agreement for handover of possession

Yusuf Rampurawala
Advocate, Mumbai
6878 Answers
79 Consultations

5.0 on 5.0

This is my response to you:

1. Once you agreed to the 10% cancellation, then you are bound by it;

2. As long as they have made written promise they are liable;

3. Verbal promises if you have recorded the same then the builder is liable as per Evidence Act, otherwise no;

4. Engage services of a local lawyer and see if the draft deed is valid or no;

5. If you are still unsatisfied then you can cancel the booking, but you will have to incur the losses;

6. If the draft deed is filled with loopholes, then you can complain to RERA;

Gowaal Padavi
Advocate, Mumbai
1920 Answers
5 Consultations

5.0 on 5.0

1. Send them a detailed notice seeking changes to be made in the agreement.

2. If after receipt of the notice they fail to make changes which is likely you can proceed to cancel the agreement. in the notice itself you should mention about cancellation if they fail to make changes.

3. Then lodge complaint with the RERA Tribunal seeking refund where you will apart from getting full refund would receive enough damages and compensation as well.

Devajyoti Barman
Advocate, Kolkata
22515 Answers
402 Consultations

5.0 on 5.0

Dear Client,

Promoter can only forfeit booking amount, if allottee/buyer cancel the booking for no fault of promoter.

And, No other sale agreement is permissible after RERA came into force, specific format provided in RERA rules, also available on web site which is on mutual basis, no extra privilege to builder. You can file complain to RERA for refund as promoter promised delivery by sept 2019 which without consent extended for more two years.

What documents executed with builder ?

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

Dear Sir,

You can cancel the booking and get back your amount with reasonable deductions and not 10% of sale price. You may approach RERA.


6 rules in RERA that will stop builders from delaying delivery of your dream home

The delay in possession of their homes has been the biggest concern for the buyers of the real estate properties. For many of the homebuyers, across locations and with almost the builders, the delay has extended to almost six years or more now, with no possession in sight. In the absence of a regulator and with no rules in place, the builder-buyer battle appeared one-sided.

Now, the real estate sector has got its own regulator from May 1, 2017, the date when the Real Estate

(Regulation and Development) Act, 2016 (RERA) became effective in the entire country. Each state and UT will have its own Regulatory Authority (RA) which will frame regulations and rules according to the Act.

Let's see what's RERA has got in store to ensure timely possession of properties. In respect of the ongoing projects that have not received a completion certificate, the developers have to get them registered too. Once registered, they too will have to follow the rules, regulations of the state RA.

Promoters promise

There are six important provisions in RERA that may prevent the builders from delaying the projects and stick to deadlines rather than making a d ..

1. Written affidavit: The promoter's promise will now have a legal standing to it. Along with all the required documents, the promoter has to give a declaration, supported by an affidavit stating the time period within which the project or the specific phase will get completed.

2. Possession date will be sacrosanct: Further, the 'agreement of sale' will have to specifically carry the date of possession and the rate of interest in the case of any d ..

of any default. Remember, the time period could differ amongst builders. "For new projects, the committed date of delivery is the choice of the developer and so the customers will need to take a decision if they find that the committed date of delivery is too distant they can opt to not purchase the apartment," says Rohit Gera, Managing Director, Gera Developments.

3. Clear title of the land: At times, the land on which the project is supposed to be built gets involved in disputes leading to a delay in construction and delivery. A written affidavit has to be provided by the promoter that the legal title to the land on which the development is proposed has legally valid documents with authentication of such title if such land is owned by another person.

4. Free from encumbrances: Often, it has been seen that several projects get delayed due to encumbrances which can restrict the promoter's ability to transfer title to the property. A written affidavit has to be provided by the promoter that the land is free from all encumbrances.

5. Maintaining separate account: Diversion has been the most common concern across the industry. Now, as per RERA, 70 percent of the amount realised for the real estate project from the buyers, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose.

The withdrawals from the account will be according to the extent of the work completed after it is certified by an engineer, an architect and a chartered accountant and will be subject to an audit every six-month. Such measures to a large extent are expected to minimise the diversion of funds, if not fully.

6. Making it an offence : In case of not adhering to the rules, the builder stands not only to lose the registration of the project too but may also be punishable by imprisonment for a term which may extend up to three years or with fine which may extend up to a further ten per cent of the estimated cost of the real estate project, or both. Some states have, however, compounded the offence to avoid imprisonment of the developers.

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

if you are no more interested in the flat, you may communicate your decision to cancel the booking and demand refund of the booking amount for the reasons that the builder never shared the sale agreement even after more than a year of booking whereas he was supposed to have done it within 30 days of taking the token money and also the promised items are missing in the sale agreement.

If the builder is not responding or not complying with the demand made you may either take up the matter with RERA or to the consumer court for relief.

T Kalaiselvan
Advocate, Vellore
78057 Answers
1543 Consultations

5.0 on 5.0

They are still verbally promising everything, but not ready to put anything in the agreement. In the booking form we signed, they have mentioned that they can deduct a 10% of the total amount if we cancel. Does that still hold good with RERA in the picture?

The 10% deduction is not on the property value.

If the agreement is lopsided or not in favor of the buyer then you can agitate it and can very well decide to cancel the booking if the promised things are not appearing in the agreement.

You may decide based on the prevailing situations.

T Kalaiselvan
Advocate, Vellore
78057 Answers
1543 Consultations

5.0 on 5.0

You can exercise Consumer court remedy also in this case. In rera also you will get the refund and justice.

Prashant Nayak
Advocate, Mumbai
27232 Answers
88 Consultations

4.4 on 5.0

You can serve a legal notice to the builder stating that they've not complied with the provisions of RERA by not providing you the said documents, despite of repeated reminders and follow up. Also state that they haven't incorporated the various points, as promised to you. Hence, you can seek cancellation from the builder.

If he fails to adhere within 15 days of the receipt of legal notice, they can file a complaint under RERA or in consumer court under CPA seeking refund, damages and legal expenses.

Siddharth Jain
Advocate, New Delhi
5925 Answers
101 Consultations

5.0 on 5.0

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