• Cancellation of Agreement

Hello,

We are in the process of canceling one property earlier booked by us. After multiple follow-ups and sending a formal cancellation request letter to the builder, he did agree upon the cancellation but we haven't signed on the cancellation letter yet as the language doesn't seem to be in our favor. 
We would require some help to go over the letter sent by us, sent by the builder and the clause in the agreement as per which he has given this cancellation letter.

To give you a background, we agreed upon purchasing this property and made the initial payment on April 18, 2018, visited the location multiple times but didn't see any progress. Builder mentioned to us about funding issues in all the previous meetings and due to trust issues, we want to cancel this booking. We have clearly mentioned to the builder, that due to this delay and trust issues, our parents have got into tension and are dealing with mental health issues already.
Based on the agreement, clause 20.3 says the following:

20.3: if the purchaser desires to terminate/cancel this agreement without any reason, the purchaser shall notify the sellers of his/her/their intent to terminate in writing and by submitting the original of this agreement and this agreement shall stand terminated without any requirement of any further documentation. The notice of termination coupled with the return of the original of this agreement shall serve as the document evidencing termination. On termination by the purchaser, the seller is entitled to forfeit 10% of the sale consideration and cost of construction payable by the purchaser under this agreement and refund the balance amount paid by the purchaser within 90 days from the date of sale of the schedule "c" apartment to any other third party.

The builder has mentioned Clause 20.3 for cancellation reasons and sent a letter to us for accepting and sending him back. Since 20.3 is not in our favor, we haven't signed it yet. Copying the matter from the letter for your reference:

We are in receipt of your correspondence dated 31.08.2019, requesting for cancellation of the above unit booked by you vide agreement to sell dated [deleted].

As per clause 20.3 of the agreement, on cancellation of the agreement by the purchaser prior to the completion date of the project, the sellers are entitled to forfeit 10% of the sale consideration and cost of construction payable by the purchaser under this agreement and refund the balance amount paid by the purchaser within 90 days from the date of sale of the Schedule C apartment to any other third party.

In view of our valued relationship with you, we are pleased to confirm that we will not be deducting the 10% of the sale consideration from the amounts deducted. The sale consideration paid till date shall be refunded to you within 90 days of the sale of unit 401 to any other customer as per the agreement.

Remaining can't be copied here due to character limitation.
Asked 4 years ago in Property Law
Religion: Hindu

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13 Answers

Yes it's in your favour then you don't have to worry you are in advantageous position

Prashant Nayak
Advocate, Mumbai
31807 Answers
175 Consultations

4.1 on 5.0

You can make complaints against builder in the RERA office and Consumer Forum of your city.

Ganesh Kadam
Advocate, Pune
12910 Answers
253 Consultations

4.9 on 5.0

as per clause in your agreement in event of  cancellation builder can deduct 10 per cent of sale consideration 

 

builder is not deducting 10 per cent of sale price but shall refund your money on flat being sold to third party 

 

you are not concerned with sale of flat to third party . Once you have cancelled booking builder should refund Your money 

Ajay Sethi
Advocate, Mumbai
94522 Answers
7485 Consultations

5.0 on 5.0

1. Your query is lacking many vital details. What is the date of delivery of possession according to the original agreement?

2. Unless the builder is past the date of delivery of possession plus the grace period he is entitled to apply cancellation charges against you.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

So, the builder wants to sit over your money until someone else purchases Flat/Unit No. 401.

I think this is a trap as the Builder instead of immediately refunding your deposit after the subjecting the same to deductions under Clause 20.3, is arbitrarily saying that he will be able to refund only post 90 days of sale of Unit No. 401. I think you should give approval to this proposal of the builder. 

Vibhanshu Srivastava
Advocate, Lucknow
9588 Answers
303 Consultations

5.0 on 5.0

Gd Mrng sir,

While going for cancellation of your unit is not an issue,  builder will deduct 10% of the amount paid by you and refund the rest that is only after the sale to third party and which is clearly mentioned in the agreement clause and after going through the agreement clause you the purchaser have agreed to terms and conditions and have executed the agreement based on this clause you have a right to claim for redund and builder are liable to pay refund after saling out to 3rd party..

 

Ayesha Sultana
Advocate, Bangalore
280 Answers
1 Consultation

Not rated

At this point of time it is advisable that you have to deal with this builder amicably so that you can get a refund in case you go by the clause 20.3  is in favour of the Builder and she can deduct 10% of the sale consideration as well as the cost of construction and eventually in case you go for the consumer forum for the complaint you will not get any relief from there please handle this issue carefully so that you can get your refund the agreement signed by you is in force and can be implemented by the Builder in case it is required

Vimlesh Prasad Mishra
Advocate, Lucknow
6852 Answers
23 Consultations

4.9 on 5.0

See the builder not forfeiting the amount is in your favor though builder refunding amount after sale to third party goes against us as there is no definite time and it can take long time for the refund. Though in case they are not deducting the amount you can ask them for a refund after a definite period you can ask them to quote definite period for refund and removing condition of refund after sale to third party. 

Shubham Jhajharia
Advocate, Ahmedabad
25514 Answers
179 Consultations

5.0 on 5.0

if you cancelled booking then builder should refund your money or you can file complaint before district consumer court and claim refund along with interest. 

Mohammed Mujeeb
Advocate, Hyderabad
19299 Answers
32 Consultations

4.7 on 5.0

As per law, If you will cancel  the booking , due to any fault of builder, such as, delay in delivery/construction etc , then you have right to  get entire amount along with compensation back from the builder.

- Since , the builder is ready to refund the amount paid by you on the conditoin of selling the same to some other buyers , you have also this option as welll to sell the said flat to your known , if avialble. 

- As per law, you are not bound to wait for a new customer, but have right to take refund the entire amount due to the fault of builder , as the construction was not in progress .

- If, you not get refund the amount within 30 days time of cancellaton, then you should approach Consumer court .

Mohammed Shahzad
Advocate, Delhi
13095 Answers
195 Consultations

5.0 on 5.0

If builder is not deducting the cancellation charges then you can proceed with cancellation of Agreement.

And ask builder to change the refund clause as there is no particular date for refund is mentioned in cancellation agreement you can ask for particular date for refund of money. 

Mohit Kapoor
Advocate, Rohtak
10687 Answers
7 Consultations

5.0 on 5.0

Dear Sir,

You can get issue a legal notice and cancel the agreement and claim for refund of amount paid by you as advanced as per the clauses of the agreement. Normally the builders do not refund the amounts and prolong the matters for years together.

Kishan Dutt Kalaskar
Advocate, Bangalore
6135 Answers
483 Consultations

4.8 on 5.0

You can refuse to sign the letter of confirmation for cancelling the agreement.

You can state that the conditions for refund is one sided and it is not acceptable to you.

You can make a mention that they can deduct upto 10% amount out of the booking amount and not out of the sale consideration amount.

Failing to comply with the same, you may drag the builder to RERA or consumer forum.

The one sided agreement is not valid in law and cannot be enforced by the builder 

 

T Kalaiselvan
Advocate, Vellore
84711 Answers
2172 Consultations

5.0 on 5.0

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