Yes you can do the aforesaid. But if builder objects you need to seek termination through court
Agreement of Sale has forfeiture clause-OC requirement
The clause says: If the purchaser commits any default in the payment of any amount as aforesaid within 15 days from the date of issue of notice for payment or in observing and performing any terms and conditions of this agreement, the first party shall have a right to terminate this agreement and forfeit 10% of the entire contract amount agreed to be paid by the purchaser irrespective of the advances paid by the purchaser and the First party shall refund the balance amount, if any to the purchaser. There is no mention of CC and OC in the agreement but I was not aware of its importance earlier and signed the agreement on 16th June 2020. However there is another clause that says: “The purchase shall pay such deposits, costs, share association fee, deposit, cost of stamp papers, registration fee, legal fee and such other expenses as may be required for the formation of association and the transfer of undivided share, right, title and interest infavour of the purchaser and other formalities of obtaining completion of apartment and handing over of the possession of the apartment herein agreed to be constructed for the puchaser” Today I got in writing in mail from builder that OC is not applicable. Given that the above clause is contradicting what he says in mail that OC is not applicable, can I initiate agreement termination without being subjected to forfeiture clause of 10% of total cost. The total cost is 60lacs and I have paid 10lacs as downpayment for loan. I am looking for full refund of my money due to builder denying OC. Please advise Please advise. Regards
Asked 5 years ago in Property Law
Religion: Hindu
15 Answers
FileRTI with BBMP asto whether OC is required for your projector not
2) if you receive reply that OC is required and builder refuses to provide OC then you can cancel agreement and seek refund of money paid by you
3) on cancellation of booking builder cannot deduct 10 per cent of sale price
4) at most he can deduct 10 per cent of booking amount
OC is mandatory, builder cannot refuse. On this ground only you can refuse the deal and demand refund.
You are entitle to full refund. If not paid, file FIR and also complain to RERA.
And above all, delivery of possesion without OC is illegal.
1. Firstly seek information from the municipal corporation on required and issuance of OC. After the same is confirmed issue legal notice to builder asking to cancel the booking and agreement and refund complete amount.
2. If he fail you have to file a consumer complaint seeking refund of amount along interest.
1. If the builder gives contradictory version about the construction and its formalities and later avoiding something which is even important for the same then the act would be unfair trade practice and deficiency of service.
2. In that circumstances you have the option of cancelling the agreement. Irrespective of the terms of the agreement the builder can not deduct a huge sum of money, least 10% of total price.
3. Now to redress your grievance in the event builder raises dispute you can file case before the consumer forum.
- Occupancy Certificate evidences the completion of the building as per the approved plan and compliance of local laws.
- If the builder is unable to obtain the occupancy certificate, it means that the builder has violated building law or deviated from Construction Plan, and further it is illegal to occupy in a building or apartment that doesn’t have an occupancy certificate.
- Further, It is illegal to occupy in a building or apartment that doesn’t have an occupancy certificate. Buildings without OCs are not given a water connection and are charged a higher property tax.
- Hence, in the absence of an Occupancy Letter, you should not enter into an agreement with the builder.
- Further , there is no guidelines laid down by the government to forfeit the booking amount for the cancellation, and the deduction is done at the builder’s discretion.
- Hence, legally, the builder cannot deduct any money out of the advance payment you have made for the booking till the time; a builder-buyer agreement is made and registered with the sub-registrar.
- Further, A builder-buyer agreement is not created until the buyer pays at least 10 per cent of the property value.
- Further, as per Real Estate Regulation Act (RERA), home-buyers 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 bound by law to return the money collected from buyers within 45 days, after deducting the booking amount.
- Hence, if you have already paid 10 percent of the flat value, and the said agreement signed by you , is not registered in the office of the Registrar , then you are liable to get full amount refund paid by you ,even there is a clause present in the agreement for not refunding , and if the said agreement is registered , then builder has right to deduct booking amount from the paid amount.
- Further , since you are cancelling booking due to misguide of the builder , hence you can get refund of whole amount with interest as well.
- If, builder not refunding the same ,then you should lodge your complaint before the Consumer court , and thereby prayed for the refund of paid amount with interest.
A. OC is mandatory before occupy any building in Apartment structure.However, you need to check with the builder as to why OC is not applicable for this building structure? In the event of the builder is not able to provide OC towards your flat you can cancel the flat and claim entire advance paid to builder. In order to receive the same you need to issue a notice against them for refund of the advance money by cancellation of flat.
B. However if the builder is being so mean and reckless even after issuance of notice you can approach the RERA or Consumer Forum under the unfair trade practice and deficiency in service.
1. You have an positive option to file a grievance petition against the Builder /Developer, in the local Consumer Court, for their illegal trade practice, negligence, deficiency, harassment, intimidation, cheating etc.... with proper documentary evidences and you can claim damages /compensation & interest on your investment, and for your physical & mental trauma.
If the cancellation is due to the fault of the builder then you can ask for full refund of the booking amount with interest.
As per the new RERA rule, if you cancel such a booking, builders will have to return your money within 45 days. If they don’t pay back, you can file a money suit claiming the rest amount along with compensation.
The Real Estate Regulation Act (RERA) will help the buyers to take an exit from the real estate world easily and anytime. So, if a buyer wants to cancel the flat booking, then the builder has to pay the payable amount to the home buyer. If he denies paying the amount then the buyer can file a complaint against him and ask for compensation.
If terms for cancellation are missing then 100 per cent refund can be claimed from the developer. In case a developer refuses to repay the booking amount even with a clause present in the agreement, the buyer may file a case with the consumer forum asking for a refund with interest
Serve them with a legal notice and later file a suit for specific performance for getting full refund
OC, it is mandatory for every residential complex which has more than five units.
you can cancel the said agreement and seek refund of money.
if builder refused, For this you have to file a case in Consumer forum for Deficiency of service asking ur money with interest and compensation with cost of litigation.
Dear Sir,
Even if there is no mention in of OC/CC but there should be time line for handing over the possession to you. If that is not mentioned, the agreement is void ab initio and you are suggested to ask for the same and if the same is doubtful, withdraw from the project and ask for the refund with interest and compensation.
1. Forfeiture clause forms a part of every agreement to sell.
2. The second clause extracted by you only states that the purchaser shall pay the expenses to be incurred on obtaining completion certificate, but this clause has been incorporated to cater to a situation where CC is required, but if CC is not required then there is nothing 'contradicting' in the clause.
3. You should have got the entire ATS vetted by a lawyer before signing it.
4. There is no default attributable to the builder, which can be gathered from your query. Hence, if you initiate termination now the builder can invoke the forfeiture clause.
If he has reneged on his promise then there cannot b3 any deduction by him. File a complaint in the RERA tribunal against this injustice immediately. He cannot deduct the amount when the fault is his.
1. Yes you can initiate termination of agreement on ground of not applicable of OC.
2. I will suggest to continue with the deal and later force builder to provide OC at time of possession.
