MahaRERA Rules: Developers Cannot Forfeit Full Booking Amount Without Sale Agreement
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has ruled that developers cannot forfeit the entire booking amount if the sale agreement is not signed. Developers can only deduct 2% of the flat’s cost as cancellation charges.
MahareraReal EstateHomebuyersBooking AmountSale AgreementReal Estate MaharashtraOct 12, 2025
The case in question involved a homebuyer, Rajesh Singh (name changed), who had booked a 2 BHK apartment worth ₹62.9 lakh in Panvel, near Mumbai. The homebuyer had paid ₹6.55 lakh, including taxes and stamp duty. The booking was later cancelled after the developer allegedly failed to secure a home loan under an interest subvention scheme, as had been promised earlier.
When the homebuyer sought a refund, the developer forfeited the entire amount. This prompted the buyer to approach MahaRERA, demanding a refund with interest and compensation. The developer argued that since no agreement for sale had been signed, the buyer was not entitled to relief under RERA.
However, MahaRERA rejected this contention, stating that the booking form itself was provisional and could not be treated as a final allotment letter or binding sale agreement. “If the booking form is provisional in nature, the amount accepted from the homebuyer shall also be treated as provisional,” the MahaRERA, in an order dated October 3, 2025, said.
MahaRERA cited Order No. 31, issued in 2022, which states that a developer is allowed to forfeit only up to 2% of the unit's cost when a booking is cancelled after 61 days. Since the developer had forfeited the full ₹6.55 lakh, MahaRERA ruled that the developer must refund the remaining amount after deducting only 2% of the total consideration within 60 days.
The MahaRERA also noted that the developer had accepted more than 10% of the flat’s cost without executing a sale agreement, which is in violation of Section 13(1) of the Real Estate (Regulation and Development) Act, 2016. This section prohibits promoters from taking more than 10% of the property value before signing the agreement for sale.
While the MahaRERA ruled in favor of the homebuyer, it also rejected additional claims for compensation, along with several other components, as well as the refund of the consideration amount.
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has been instrumental in regulating the real estate market in the state. Since its inception in May 2017, MahaRERA has registered over 50,000 projects and addressed nearly 30,000 complaints from homebuyers and other stakeholders. This ruling is a significant step towards ensuring transparency and fairness in real estate transactions, protecting the interests of homebuyers.
Frequently Asked Questions
What is MahaRERA?
MahaRERA stands for Maharashtra Real Estate Regulatory Authority. It is the state’s real estate regulator responsible for ensuring transparency, accountability, and consumer protection in the real estate sector.
Can a developer forfeit the entire booking amount if the sale agreement is not signed?
No, according to MahaRERA, a developer cannot forfeit the entire booking amount if the sale agreement is not signed. They can only deduct 2% of the flat’s cost as cancellation charges.
What is the maximum amount a developer can take before signing a sale agreement?
According to Section 13(1) of the Real Estate (Regulation and Development) Act, 2016, developers are prohibited from taking more than 10% of the property value before signing the agreement for sale.
What should a homebuyer do if a developer forfeits the full booking amount?
If a developer forfeits the full booking amount, the homebuyer should approach MahaRERA to seek a refund with interest and compensation. MahaRERA can intervene and ensure the developer follows the regulations.
How many projects has MahaRERA registered since its inception?
Since its inception in May 2017, MahaRERA has registered over 50,000 projects and addressed nearly 30,000 complaints from homebuyers and other stakeholders.
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