• Cancellation of my Flat

Dear All,

I bought a flat around 3 years back, total cost of the flat is around 52.90 Lacs, out of which i have already paid 37.50 lacs to the builder. Out of which 10 lacs is earnest money. Now i want to cancel my flat due to some personal issues. I have applied for the cancellation of the flat. Now builder is saying that they will refund the money in 4 months only after deducting the commission amount Rs. 1.50 lacs paid to the broker by them ,  . Whereas total payment 37.50 lacs payment clearly paid by me directly to the builder. I have taken up the matter with the builder and said it is unfair practice to deduct commission paid by you from my amount. They said if they go as per law they can forfeit the earnest money  amounting to Rs. 10 lacs, (as written in the agreement to sell)  and said as i am cancelling the flat so i am on default. Other way i have paid amount Rs. 5 lacs on account of interest paid to bank against the loan taken  for the said flat. And i am not claiming any interest amount from the builder , moreover they are going to sell the property at the premium. And i am loosing the interest amount plus commission amount total 6.50 lacs. So Please advise 

1.) Can the builder deduct such amount of commission from my payment in my case.
2.) Can the builder forfeit the earnest money amount , if it is written in the agreement. 
Also advice what are the remedies available against my case.
Asked 1 year ago in Property Law from Mohali, Punjab
Religion: Hindu
1) builder can deduct earnest money if mentioned in the agreement 

2) builder cannot deduct commission paid to broker of rs 1.5 lakhs . 

3) since builder is willing to refund your money in 4 months time accept the offer 

4) ask the builder to give in writing that he wont forfeit earnest money paid and will refund Rs 36 lakhs after 4 months 
Ajay Sethi
Advocate, Mumbai
23206 Answers
1218 Consultations
5.0 on 5.0
1)agreement is drafted in favour of the builder 

2)if there is no time frame mentioned it should be started within reasonable period of time 

3)builder is  entitled to grace period of 6 months if they are unable to complete construction within period of 3 years from starting of construction 

4)there must be clause regarding cancellation of agreement . if you cancel agreement now builder will forfeit advance money paid by you 

5) agreement is one sided . in case you have to pay interest for delay in making payment builder should pay interest for delay in completion of project . in such a case consumer can move consumer forum to direct builder to pay interest for delay in completion of project .

6) if builder is unable to give direct approach to high way as provided in the brochure or videos you would be at liberty to cancel agreement and seek refund of money paid by you . i do hope you have copy of said video 

7) contact a local lawyer . agreement signed by you has to be perused for further advice 
Ajay Sethi
Advocate, Mumbai
23206 Answers
1218 Consultations
5.0 on 5.0
1. Can they hold the construction after getting the earnest money.  I mean what is the time frame of getting it started. 
If there is  no time stipulated for this purpose you may have to verify the same from the other sources only.


2. What is the meaning of the grace period, because normally they are bound to give the property in 3 years. When they are eligible to take the relief of grace period.
The grace period is the extra time to adjust the unforeseen events like calamities whether natural or man made or any other unavoidable situations due to which the delay is likely to be caused.


3. When it can be clearly seen that they will not be able to complete the construction till June 2016, even if we take start of construction Dec-12 as per them. As in last 3 years they completed only 50% how can they be able to complete balance 50% in next 9 months. Why cant we get it cancelled right now, instead of cancelling the same after 9 months even after loosing more money on account of interest to be paid in next 9 months. I mean what is the remedy available for consumer. 
Legal remedy is given in the terms and conditions  of the sale agreement, a copy of which is held in your possession.


4. They have mentioned in sale agreement that allotte will not be paid any interest if he cancels the flat in case of default of builder.  But allotee has to pay interest if he fails to pay timely payment to builder.What is the remedy available for this. 
You may have to revisit the conditions to properly understand the terms, it will be injustice to say so hence the same cannot be held legally valid.


5. Last most important builder showed us videos showing direct approach from highway to his project , which he has unable to give till now.
The builder cannot make his own rules on this aspect, do not get cheated by such frolics or gimmicks, it might be a sales promo ad. 

T Kalaiselvan
Advocate, Vellore
13985 Answers
127 Consultations
5.0 on 5.0
1. Unless there is a clause in the agreement which provides for deduction of the commission paid to the broker the builder cannot deduct it.

2. The forfeiture clause can be invoked if is incorporated in the agreement, but the builder can do so only if the cancellation has been sought by you due to reasons which are alien to the proviso of the forfeiture clause.

3. The builder is not under any obligation to start the construction by a specific date. His obligation is to deliver the possession within the time frame mentioned in the agreement. His failure to comply with this clause would make him liable to refund the earnest money and balance amount in entirety and also compensation payable to you.

4. If the construction has not yet commenced then it is most unlikely that it will be complete within the promised time. You should wait for the expiry of the time frame mentioned in the agreement and then seek cancellation. 
Ashish Davessar
Advocate, Jaipur
18096 Answers
448 Consultations
5.0 on 5.0

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