RERA: Refund of the Booking amount by the builder

RERA-refund-of-the-booking-amount-by-the-builder

Real Estate (Regulation and Development) Act, 2016 is going to complete a year and people are still skeptical about the implementation of the provisions of the act. One of the vital point which was not covered under the provisions of RERA was the refund of the booking amount as on the basis of same the home-buyer can’t get the status of an allottee as per Section 2(d) of the RERA Act and for the maintainability of the case a complainant should be an allottee.

Lately, the Maharashtra Real Estate Regulatory Authority in its ruling shed some light on the refund of booking amount as in its order the authority directed the developer to give back the amount of Rs 1 lakh which was paid as a booking sum by the home-buyer.

The complainant, Sanjiv Gill had booked a studio level in ‘UK Iridium’ at Kandivali East. The booking amount was paid on May 28, 2017, and 4 months later on he asked for the refund of the amount which he had paid at the time of booking, the Developer didn’t give any response to his cancellation request and finally, the complainant had to knock the door of RERA Authority.

In hearing proceeding the legal representative of the developers said that this case is not maintainable as per the provisions of the RERA as there is no section regarding the refund of booking amount.

He also made a statement that the complainant doesn’t have the status of allottee as per Sec 2(d) of the RERA Act and also no Builder-Buyer was not executed between the parties so on the basis of the same, the advocate of the developer plead before the authority to reject the complaint outrightly.

The RERA bench of Maharashtra after observing the submissions of both the sides said that the developer had violated the Section 3 of the RERA Act as he accepted the booking amount before taking registration of the project with MAHARERA and this action is void ab initio. As per Section 3 of the act “No person shall sell or book the flat, make any purchase in any manner, any plot, apartment or building in any real estate project without registering the project with RERA,”

The MAHARERA Authority eventually made an order where the clear directions have been given to the builder to refund the booking amount of Rs. 1 lakh and simultaneously he has to pay Rs. 50,000/- as a penalty to violate the section 3 of the RERA Act.

In the light of the above we can reach to the outcome that even if the Builder-Buyer agreement is not executed and the complainant is not falling under the definition of an allottee, he may still approach RERA Authority to seek for the legal remedy. Although seeking for the recourse as per the act also depends upon the facts and circumstances of the case.

 

Disclaimer – The above points are based on the personal interpretation and understanding of the RERA rulings, which may differ person to person. The readers are expected to take expert opinion before placing reliance on it.

 

Comment

  1. Hello,
    I have bought a house in Sobha dream acres project. I want to cancel the property and the property is under tera. I am not sure about my booking amount. I have paid an initial payment of 610000 Rs, and it states in my ledger that this was towards land cost. And if I am not wrong rera clearly mentions that builder can keep booking amount. If I cancel now, will I loose my initial payment money?

  2. I have booked the apartment in Sobha Dream Acres Bangalore with booking amount 90k in FEB 20 this year. Next day I realized that they are hiding some facts about the property related to corridor. Then I have cancelled the booking next day by verbally telling on call and also by sending them a mail of booking cancellation. Now it have been 5 months and i yet to get my refund even after I am following them in a regular basis. They are only telling that they will refund as per company policy.But seems like they are taking matter seriously. They also keep giving me fake commitments every time I call. Please help me as I need money immediately as I am suffering in a financial crisis issue. I heard that in RERA compliance, builder should refund the amount in next 45 days of booking cancellation but in my case it already have been 5 months.Also they told they will not refund full money i.e 90k. They will only refund 40k.I am not sure why they are deducting 50k rs. Now as it have been 5 months of suffering , I am seeking some penalty too on the builder to keep holding my hard earn money. Please help me and suggest if it is possible to get refund earliest. Attached are the payments done at the time booking.

  3. I have booked A flat in Sethia imperial avenue d( Sethia infrastructures)& given 200000/- as booking amount but due to financial crisis in want to cancel it.no buyer- builder agreement made yet.can I get refund of my booking amount of Rs 200000/-

  4. Sir we booked a apartment in Omaxe new Chandigrh, as we moved back from Canada , as we don’t have income prove in India. That why bank rejected loan, but buider lies at the time of booking they’ll get the loans done . Now we’re asking our booking account back there saying they will deduct money. Can you please guide us how get our money back.

  5. Hello

    I booked a Flat with a Builder, 6 lacs as first Booking amount and gave the cheques for Booking amount 2 & 3 for after a months time. Later four days my banker refused to sanction loan. I understood that won’t be able to get loan and initiated cancellation after 10 days after application/First booking amount and mentioned in writing not to produce my another two cheques and issued stop payment.

    The builder got finance team and they kept hanging the case mentioning they are getting the loan done for me from HFDL. Asked to submit my documents to Bank. After some time that too got denied. After crossing the Booking dates, The Builder sent notices mentioning all amount are fortified. No Refund.

    Please help should i go to RERA office to file complaint ? or Consumer forum ? or directly to Court ?

    I’m reachable at

    Thank you

    1. Yes, based on the preliminary facts, you can file case before RERA. You can even file case under IBC. However the final advise would be based the final facts.

  6. Hello

    I booked a Flat with a Builder, 6 lacs as first Booking amount and gave the cheques for Booking amount 2 & 3 for after a months time. Later four days my banker refused to sanction loan. I understood that won’t be able to get loan and initiated cancellation after 10 days after application/First booking amount and mentioned in writing not to produce my another two cheques and issued stop payment.

    The builder got finance team and they kept hanging the case mentioning they are getting the loan done for me from HFDL. Asked to submit my documents to Bank. After some time that too got denied. After crossing the Booking dates, The Builder sent notices mentioning all amount are fortified. No Refund.

    Please help should i go to RERA office to file complaint ? or Consumer forum or directly to Court ?

    Thank you

  7. Dear Sir,
    I have booked a flat and paid booking amount of RS. 4 lakh for it. I have neither completed any agreement for sale nor signed any other documents. I have cancelled my booking because bank is not given loan due to some legal issue with property. Then I cancelled my booking and builder returned my money after deduction of GST which is nearly 43000. Same flat which I have booked is sold out within few days to another customer by builder. Now I wish to know that whether I am eligible to get GST amount back or not? If yes then what is the procedure to get it. Logically it should be refundable because how can a builder take GST two times for same flat.
    Kindly guide me.

    1. As per GST regulations, if any sale/transaction is cancelled the GST payable shall be reversed. Hence based on the primary facts, you are eligible for GST refund.

  8. My father and mother have booked a shop in an upcoming mall named core mall by paying 4lakhs through cheque for unit amounting RS 26 lakhs (24lakhs bsp and 2lakhs other charges) by signing a booking form on 1st sep 2017. My father died next month in an sudden cardiac arrest on 13 Nov and we approached the builders narrating our financial crisis for processing our cancellation. The cheque was encashed by the builder on 30 nav even when they were aware dat we need cancellation and refund. We were told to write an email regarding cancellation. We kept asking for email address which was given to us after continuous pursuation after a delay of three months. We wrote many mails and finally received a response after two months that we need to process cancellation in paper. No terms and conditions were explained and it was informed we shall get the entire amount after 90 days of processing the application. We trusted them and waited in which the builder said he can give only 30% of the money as remaining 70%is with rera escrow account for which he has sent our file to Rera and rera will give them the permission only after which they will refund. We told the builders to process the complete u amount for refund and not 30%as the builder was it giving this in writing.We kept waiting for an year but nothing happened. On meeting the manging director directly we were informed that booking form says 15% of the earnest money will be deducted but no terms were mentioned other den this.. no builder-buyer agreement was ever signed disclosing the details terms and conditions.
    My family is in trauma and financial crises after my father’s demise.

    I need to know
    1. What legal options do I have under rera
    2.why builder was insisting on refund of 30% initially
    3.does a file goes to Rera for cancellation
    4. He basic selling price was 24lakh but how much will be the booking amount is not mentioned. We paid 4lakhs which is 16%od bsp yet no agreement was processed.
    5. Wat is an earnest money in discase Is it15% of the money paid as advance or 15 %of the total shop value that me may not refund.
    6. Ours is family emergency can we get the entire money refunded

  9. Hi I have booked flat at Mumbai and given 2 lac as booking amount. The project is Rera Resgistered. But now I have read google reviews of that builder and i came to know that he has cheated the customers in past. So now I don’t want to goahead. Can I get my booking amount back. In the application form it is mentioned that amount is non refundable

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