Godrej Can't Forfeit 10% On Booking Cancellation; MahaRERA Ruling

Maharashtra Real Estate Regulatory Authority (“Authority”) bench comprising Mahesh Pathak (Member I), held that a builder can forfeit only 2% of the total sale consideration if the Homebuyer cancels the booking. Accordingly, Authority found Godrej Properties claim to forfeit 10% of the total sale consideration to be unjustified. Background Facts Homebuyer (Complainant) booked a flat in the Builder's (Respondent) project “Godrej Ascend Phase 1” on 16 August 2022 by submitting an application form and paying a booking amount of Rs. 6,80,000. This amount was 10% of the total flat price of Rs. 68,00,000. After some time, the Homebuyer decided not to proceed with the booking for personal reasons. The Homebuyer requested the Builder to cancel the booking and refund the amount paid. Builder refused to return the booking amount and informed the Homebuyer that the entire sum would be forfeited. Being aggrieved by the Builder's refusal, the Homebuyer filed the complaint before authority seeking refund of the booking amout. Contentions by Builder Builder stated that as per Clause 8 of the application form 10% of the total consideration would be forfeited in case of cancellation. Builder contended that it should not bear a loss due to the Homebuyer's financial inability, as the Builder had already incurred expenses for construction, administration and marketing and had suffered opportunity loss. Observation and Direction by Authority Authority observed that the Homebuyer did not establish any violation of Section 18 or Section 12 of RERA, 2016 which deal with the return of amounts with compensation and Builder duty to ensure the accuracy of advertisements or prospectuses respectively. Accordingly, the Builder is not liable to refund the amount with interest or compensation to the Homebuyer. However, the Authority noted that the forfeiture of 10% of the total consideration claimed by the Builder is neither legal nor justified under the RERA Act. Any forfeiture must comply with the statutory framework of RERA and cannot be arbitrary or disproportionate. Authority referred to its earlier order issued in 2022, which permits builders to forfeit up to 2% of the total consideration in case of cancellation by the homebuyers. In view of this, Authority directed the Builder to refund the amount paid by the Homebuyer towards the flat after deducting 2% of the total consideration (excluding statutory dues paid to the government or brokerage) within 45 days. Case – Rahul Naresh Bari Versus Godrej Properties Limited Citation - Complaint No. CC12400126Click Here To Read/Download The Order

Godrej Can't Forfeit 10% On Booking Cancellation; MahaRERA Ruling

Aryan Raj

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