• Refund when registration is not done

I have paid about 50% of total amount for a flat without registration. Per my understanding, the builder cannot charge any penalty if I don't want to register. As per RERA, they shouldn't have taken money beyond 10% without doing the registration? Can someone confirm if my understanding is correct ?
Asked 2 years ago in Property Law
Religion: Hindu

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12 Answers

If you have decided to cancel the booking you may communicate your decision to cancel the same for the reasons you rely upon and demand refund of your entire  booking amount.

Since there is no sale agreement registered or entered between you both and it is just a booking on verbal terms, you can demand the refund of entire booking amount, failing to comply with the demands made by the builder you may either approach RERA or the consumer court for relief and remedy

T Kalaiselvan
Advocate, Vellore
83736 Answers
2062 Consultations

5.0 on 5.0

You are correct that builder has to execute registered agreement for sale if he has recovered more than 10 percent sale consideration 


2) ypu can issue notice to builder to execute registered agreement in your favour 


3) in event of cancellation of booking by you builder would forfeit booking amount 

Ajay Sethi
Advocate, Mumbai
93539 Answers
7261 Consultations

5.0 on 5.0


Builder can deduct cancellation charges if you desire to cancel your booking 

Ajay Sethi
Advocate, Mumbai
93539 Answers
7261 Consultations

5.0 on 5.0

You may have to see the terms that have been agreed between you and the builder at the time of making payment to book your flat.

The builder will incur charges towards administration and other incidentals which he can collect only from the buyer.

Therefore it is pertinent that you go through the clause/covenant made in the unregistered sale agreement and make the claim based on the conditions that have been agreed and signed by you.

If the cancellation is due to your own decision then the builder may insist on deduction of some statutory charges.

Then it becomes your burden to prove that the builder is at fault in your claim for full refund before an authority.

T Kalaiselvan
Advocate, Vellore
83736 Answers
2062 Consultations

5.0 on 5.0

- 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. 

- 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.

Mohammed Shahzad
Advocate, Delhi
12548 Answers
174 Consultations

5.0 on 5.0

If you cancel the same and dont go for registration then he will not give you possession. If you cancel he will forfeit 10 percent booking amount. 

Prashant Nayak
Advocate, Mumbai
31100 Answers
162 Consultations

4.1 on 5.0

Yes as per RERA if the builder is receiving more than 10%, the builder is bound to register the document.


It is the duty of the builder the return the amount if sale is not through, however if you have signed any document or allotment letter with the builder please go through the same for cancellation clause.


if the builder refuses to return or delay the payment file a complaint with RERA .

Advocate, Bangalore
591 Answers
4 Consultations

4.8 on 5.0

tbh yours is not a valid legal claim

you voluntarily paid 50% consideration when you had knowledge that on payment of 10%, an agreement has to be registered

now you cannot use the non-registration of the agreement as a ruse to wriggle out of your liability under the contract with the builder

when you go and complaint to RERA, the builder will readily say that he is ready to register the agreement with you

your refund claim will thus have no legs to stand then

if you want to cancel and seek refund there has to be a valid legal ground 

yours is certainly not a valid legal ground for exiting from the project

infact the court may impose heavy costs on you

you have to talk to the builder to take some penalty and let you exit from the project

or else find a buyer who can replace you

Yusuf Rampurawala
Advocate, Mumbai
7361 Answers
79 Consultations

5.0 on 5.0

Hi, as per RERA, the Builder Can't demand more than 10% total value of the amount. So it is violation of  RERA Act.

Pradeep Bharathipura
Advocate, Bangalore
5572 Answers
332 Consultations

4.5 on 5.0

Refund rules will find a place in the agreement with the builder. If the builder has violated RERA provisions, you may lodge a written complaint with the State RERA Authority. First, make a written demand on the builder for refund.

Swaminathan Neelakantan
Advocate, Coimbatore
2714 Answers
20 Consultations

4.9 on 5.0

Dear Client,

Yes, you can ask for a refund as an Advance payment: As per the rules, a builder cannot take more than 10% of the cost of the project from the buyer as advance or application fees. This saves the buyer from having to source funds fast and having to pay a large amount. This has changed with RERA and both parties have to pay the same amount of interest.


Anik Miu
Advocate, Bangalore
8121 Answers
98 Consultations

5.0 on 5.0

Dear Querist

Its depend on the terms and conditions of the contract/agreement executed between you and the builder for purchasing/booking the Flat.


If there is any penalty clause then builder may impose penalty but as the builder is in the violation of RERA then may be try to negotiated with you.


Feel Free to Call

Nadeem Qureshi
Advocate, New Delhi
6261 Answers
302 Consultations

4.9 on 5.0

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