RERA- Forfeiture of booking amount
INTRODUCTION
A couple from Mumbai has emerged victorious in a court case where a developer refused to return their deposit after the couple changed their mind about purchasing the apartment. The tribunal decided on their complaint and granted them Rs 20.65 lakh, it further advertised itself as a protector of consumer interest in the real estate market. Not only is this decision a win for the couple, but it also strengthens the fundamental rights of the homebuyers provided in the Real Estate (Regulation and Development) Act (REDA). This blog aims at analyzing the features of this case and how RERA in general case protects the interest of the consumers in the real estate sector.
MAIN BLOG:
A couple living in Mumbai has managed to recover over Rs 20.65 lakh from a builder after the Maharashtra Appellate Tribunal (Maha REAT) observed that the builder wrongfully forfeited a part of the booking amount made by the couple. The Tribunal Office concluded that the builder had no sale agreement and was unable to show any cancellation-contributed losses.
For home buyers, the process of buying land in real estate can feel like a heartbreaking experience to say the least. In particular, a couple who belong to the Mumbai region recently came to the front lines in a fight with a builder after their booking amount was forfeited. They, however, did incur some losses but emerged from the legal squabble with the builder, owing to the provisions of the Real Estate (Regulation and Development) Act, such provisions were included here, earning them back Rs 20.65 Lakh out of all losses.
It was agreed that they would pay an initial booking amount of 13.5 lakhs for a flat and they would take a home loan to complete the cost structure. Things took a turn when the woman was the only person who had received the allotment letter, which is important for loan setup. This key issue led to them not being able to agree to a homemaker loan arrangement with the bank.
The couple even went to their builder to reissue the allotment letter with their names. It was circumstances preventing them from obtaining funds that made them cancel their booking with the builder. They denied it only to be told that the builder wanted 6.5 Lakhs more and would impose certain interest charges in the event this amount was not paid.
Not wanting to simply roll over and give in to what the builders desired, this pair went up against them legally. Under the RERA, they approached Maha REAT to claim a refund of the booking amount paid by them.
RERA has two key components that factored in their case:
Section 13: Advance Payment
Without a registered sale agreement, this section clarifies that the builder cannot ask for more than 10% of the total cost of the apartment as advance. In this instance, the builders had charged Rs 6.5 lakh extra as part of this charge and that is where it violated this rule.
Section 18: Repayment and Arranging Compensation
The promoter shall have to pay this amount with interest if the promoter fails or is unable to give possession of an apartment by the terms of the agreement for sale. This provision entitled the couple to receive a refund, as their builder neglected to provide them with an amended allotment letter which was required for the contract they were bound by.
The case was reviewed by Maha REAT and it favored the couple. The tribunal considered the actions of the builder to be unscrupulous and “beyond the pale” in violation of provisions of RERA. The Maha REAT directed the builder to return the initial booking amount of Rs 13.5 lakh with interest, aggregating Rs 20.65 lakh.
The decision highlights the need for RERA which protects home buyers and imposes transparency in real estate transactions. It also helps remind consumers to know their rights, and to see if they have been wronged. RERA mandates a transparent and equitable nature of the real estate market as builders are now expected to strictly follow it.
CONCLUSION:
This victory for the Mumbai couple under RERA is a testimony to how legal protections given to homebuyers can help. To secure justice from the builder with its unfair demands and practices, they invoked the Real Estate (Regulation and Development) Act. The order, which backed the builder to return a sum of Rs 20.65 lakh, re-establishes the need for RERA implementation as it provides clarity and sense into the real estate sector through transparency, accountability, and fairness. This case serves to not only remind the consumer regulatory authorities of their rights but also shake things up a bit in the regulation of a free and fair market regime. With RERA, one can rest confidently while dealing in real estate concerning their interests.
Author: Agrasi Khapre, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or IP & Legal Filing
REFERENCES:
- RERA: Mumbai couple wins Rs 20.65 lakh against builder who forfeited booking amount for cancellation of the deal – The Economic Times
- Section 13 of RERA act
- Section 18 RERA act
