Hi, I booked an high value apartment under EMI subvention scheme by paying 5% of total cost., signed the agreement. applied for a loan in HDFC as suggested by builder. Then i came to know about new regulations by NHB that many banks will not sanction loan under EMI subvention scheme including HDFC. Now the builder is forcing me to move to another bank with higher rate. I want to withdraw/cancel now because i dont want to change. But builder now is telling me according agreement if i cancel i will forfiet the entire 5% of the money paid (approx 16 lakhs INR). Is there anything i can do to get my money back ? Please help me.
Builder cannot force you to take loan from a bank at higher interest rate.
You should start by serving a legal notice to him asking him to repay the entire within 15 days of receipt of the legal notice failing which you can file complaint against the builder for refund in consumer court owing to the fact that the loan was not approved due to the builder. There is no need to pay any forfeiture fee to him.
You cannot be forced to take loan from another bank with higher rate
2) if loan cannot be sanctioned under the subvention scheme you can cancel booking and seek refund of money paid by you
3) builder cannot forfeit Rs 16 lakhs paid by you
4) at most he can deduct 10 per cent of booking amount under RERA
5) file complaint against builder before RERA and seek orders to direct builder to refund your money with interest
You are not at fault if sub vention scheme is declared void by govt. and under the scheme only and acc. to your feasibility, you agreed to purchase the flat but now the scheme has be dropped due to govt. intervention, you can withdraw from the project. NO fault of yours.
You are entitle to full refund with interest. Remedy available - RERA, consumer court , FIR.
okay thank you for the answers. I actually brought RERA up in the email threads with the builder. The builder disagreed by saying " We would like to draw your attention to Clause 7.06 of the agreement for sale executed amongst us, which clearly states that the Subvention Plan is just a payment plan that may be offered at the discretion of the promoters. Moreover, please appreciate that the financing option with HDFC is just facilitated by us and is not a representation or condition precedent to the sale of the Unit. Hence, the Agreement for Sale regulates our transaction and as such the Clause stated by you is not applicable. " The clause 7.06 is as shown below 7.06 Subvention Plan The Promoters may, at their discretion, at an additional cost, offer a Subvention Payment Plan to the Allottees for a portion of the Sale Consideration. A Subvention Payment Plan is a plan where, for a fixed period of time, the Promoters agree to bear the cost of the interest for the housing loan for the Unit taken by the Allottees. If the Parties opt for a Subvention Payment Plan, the Allottees confirm that they have clearly understood and agree to the following terms relating to Subvention Payment Plan which shall form part of this Agreement for Sale: And the builder also highlighted a clause from signed term sheet which states as follows: In case of cancellation of the booking by the Allottees for any reason, the Promoters shall be entitled to forfeit a sum equivalent to 5% of the Total Sale Consideration towards cancellation fees and shall refund balance amount (if any) without any interest, within 90 days of execution of cancellation deed by the Allottees. However, cancellation after customisation of Unit by Allottees is permissible only at the discretion of the Promoters and may be subject to additional charges.
Clauses in agreement cannot over rice provisions of RERA
you ate at liberty to cancel your booking and builder cannot deduct 5 per cent of sale price
1. You can file a complaint case before the RERA Tribunal against the promoter alleging defficiency in service and unfair business practice claiming refund of the amount paid by you with interest, damage and cost.
2. You have a strongb point i.e. the loan ifrom HDFC under EMI subvention scheme was suggested by the builder based on which you had entered in to the said deal with him.
3. Since HDFC has been disallowed by the NHB for providing loan under EMI subvention scheme , you have the right to withdraw the booking if the developer can not arrange for loan from any other Bank at the same rate of interest.
1. The agreement is required to be perused for giving proper advice.
2. However, your argument should be that the Promoters have already, based on their discretion, at an additional cost, offerered a Subvention Payment Plan to you for taking loan from HDFC Bank which has been accept5ed by you.
3. Therev is no clause in the said agreement that the Promoters can withdraw their discretion on the said issue.
4. You are not cancelling the booking of your own but because the apropmoters are failking to arrange the loan at the agreed terms for which you are demanding back the amount paid by you with interest, damage and cost.
Could you please specify as to what was the reason given by the bank for or non approval of the loan?
- Both parties have to abide with BBA, however you shall have to find the lacuna in agreement.
- RERA will not give you much relief in this case as it's matter of consumer issue.
- Despite of all standard guidance, best aay to guide post micro study of your agreement.
Regards
Vivey Arya
You can challenge the same in rera Or consumer court. But if your agreement jane cancellation clause your booking amount may get forfeited. Still you can try to pursue refund of the same
No, as per RERA act builder is not entitled to deduct whole amount if the flat and take 5% of its. He can take 5% of earnest money and refund rest of money to you.
The new Real Estate Regulation Act (RERA) will enable homebuyers to exit real estate deals smoothly. The Act, which came into force on May 1, stipulates that homebuyers can cancel allotment of the apartment booked with a builder at any stage even if there is no default on the part of the developer. The builder is also bound by law to return the money collected from buyers within 45 days, after deducting the booking amount.
Can you tell me in which city you had booked the above flat.
Builder can’t force you to take loan from a specific bank.
Builder cannot forfeit a single penny when agreement is cancelled due to his default.
approach before consumer forum and file complaint against builder.
1. did the NHB circular restricting sanction of loan under subvention scheme, came after you signed the agreement or before you signed it?
2. the builder cannot force you to select a lender of his choice
3. you must select a lender which will make payment of the consideration in a linked manner - that is, linked with the stages of construction
4. another arrangement would be to tell the builder that if he insists to stick to the subvention plan, then you will pay the pre-EMI and the builder can reimburse that sum to you. This will avoid switching of lender from HDFC to another which is offering the loan at a higher rate
5. also the agreement would prevail over the term sheet. The builder cannot take recourse under the term sheet to justify forfeiting of 5% consideration/booking amount paid by you. The cancellation terms as stated in the agreement will now hold the field and those terms would supersede the term sheet
6. you can also try to find a buyer who can replace you and request the builder to allot the flat to that buyer - this will ensure that the builder does not face any loss due to your cancellation
If you have decided to cancel the agreement/booking, you may communicate your decision by sending a legal notice to the builder through a lawyer or by yourself.
You can demand the full refund for the reasons that the bank is not sanctioning loan though he had promised to get it sanctioned.
Let him refuse to refund the same, you may approach RERA for legal action on the builder and get your booking amount.
The refund clause mentioned by the builder is one sided which cannot be accepted.
According to the latest supreme court judgment, the builder's one sided agreement is not valid hence the builder can be taken into task on this.
Therefore you may file a consumer case against the builder if he is not refunding any amount in this regard.
Alternately you can approach RERA also for refund.