Developer Ordered to Refund Booking Amount with Interest to Flat Allottees
Maharashtra Real Estate Appellate Tribunal directs developer to refund Rs 13.5 lakh booking fee with interest to flat allottees after cancellation of booking.
Maharashtra Real Estate Appellate TribunalMahareraRera Act 2016Avant HeritageReal EstateReal Estate MaharashtraOct 02, 2024
The developer had forfeited the booking amount after the allottees expressed their inability to make the rest of the payment, as they could not secure a loan and requested cancellation of the allotment.
MahaRERA had earlier directed the developer of the building project, Avant Heritage, to cancel the booking and refund the amount, but without interest, besides directing the registration of an agreement for sale.
However, MREAT held that the promoter had violated Section 13 of RERA Act 2016, and there is no express provision in the RERA Act by which the promoter is entitled to forfeit the earnest amount on account of the cancellation of booking by the allottee or promoter.
The tribunal observed that Section 13 of the RERA Act 2016 casts an obligation on the promoter to not accept from the allottee a sum over 10% of the cost of the flat without first entering into a written agreement for sale.
In this case, the promoter received more than 10% of the total consideration and did not execute the registered agreement for sale. The promoter raised a further demand of Rs 6.5 lakh to the allottees.
The allottees, who were represented by advocate Anil D'Souza, had jointly booked a flat in the project for a total consideration of Rs 1.15 crore and paid Rs 13.5 lakh to the promoter.
The promoter issued an allotment letter in May 2019, and the allottees sought to take a home loan. However, the bank turned down their request because the signature of one of the two allottees was missing on the letter of allotment.
Though the allottees had jointly booked the flat, the promoter had issued the allotment letter only in the name of one. Therefore, the allottees were not in a position to go ahead with the transaction and informed the promoter about their inability and sought a refund.
The tribunal said the Act is silent on the point of permissible deduction if the allottee or promoter, for whatsoever reason, cancels the booking.
MREAT further said it is of the view that there should be reasonable logic while forfeiting the amount deposited by the allottees. There is nothing on record to show that because of the cancellation of booking by the allottees, the promoter has suffered damages or loss.
If the promoter is allowed to forfeit earnest money without any justifiable reason, it will defeat the very object of the statute, MREAT stated.
Sub-section 3 of Section 18 of the RERA Act 2016 entitles allottees to seek compensation from the promoter on account of failure to discharge any other obligation imposed on him under the Act or rules or regulations under it, MREAT stated.
About MahaRERA MahaRERA is the regulatory body for the real estate sector in Maharashtra, established under the Real Estate (Regulation and Development) Act, 2016.
About Avant Heritage Avant Heritage is a building project located in Jogeshwari (East), Mumbai, developed by a real estate developer.
Frequently Asked Questions
What was the amount paid by the allottees for booking a flat in 2019?
Rs 13.5 lakh
Why did the allottees request cancellation of the allotment?
They could not secure a loan and therefore could not make the rest of the payment.
What was the rate of interest directed to be paid by the developer to the allottees?
2%
What is the provision under the RERA Act 2016 regarding acceptance of earnest money by the promoter?
Section 13 of the RERA Act 2016 casts an obligation on the promoter to not accept from the allottee a sum over 10% of the cost of the flat without first entering into a written agreement for sale.
What is the remedy available to allottees under the RERA Act 2016 in case of failure by the promoter to discharge any obligation?
Sub-section 3 of Section 18 of the RERA Act 2016 entitles allottees to seek compensation from the promoter on account of failure to discharge any other obligation imposed on him under the Act or rules or regulations under it.
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