Telangana RERA Orders Builder To Refund Homebuyer's Advance After Homebuyer Decides Not To Purchase Flat

Background Fact

The Homebuyer (Complainant) paid Rs.32,00,000 as an advance to the builder (Respondent) to purchase a flat at Regal Oak, Saidabad. However, the homebuyer decided to drop the idea of purchasing the flat due to financial problems and therefore requested the builder to return his advance money.

Subsequently, the Homebuyer issued a letter to the builder requesting a full refund. Despite this, the builder only refunded Rs.50,000, leaving a remaining balance of Rs.31,50,000. Aggrieved by this, the Homebuyer filed a complaint in TSRERA seeking a refund of his advance money.

Contention of Builder

The Builder contended that according to the terms and conditions of the booking form, any refunds, if applicable, are to be made without interest and will only be given after selling the same flat to other parties. Furthermore, the Builder argued that the remaining balance amount of Rs. 31,50,000 is to be paid after arranging the necessary funds. This is because the flat canceled by the homebuyer has to be sold to third parties as per the agreement.

RERA Order

The Authority directed the builder to refund the remaining amount of Rs. 30,50,000 along with interest of 10.65% p.a. Additionally, TSRERA directed the builder to forfeit the booking amount of Rs. 100,000 paid by the homebuyer to the builder.

The Authority referred to Clause 7.5 of the Form of Agreement of Sale annexed to Rule 38 of Telangana State Real Estate Regulation and Development Rules 2017, which is read as follows:

(7.5) Cancellation by Allottee

The Allottee shall have the right to cancel/withdraw his allotment in the Project only as provided in the Act:

Provided that where the allottee proposes to cancel/withdraw from the project without any fault of the promoter, the promoter herein is entitled to forfeit the booking amount paid for the allotment. The balance amount of money paid by the allottee shall be returned by the promoter to the allottee within three months of such cancellation or at the time that the Promoter is able to resell the said Apartment/Plot to another purchaser, whichever is later.

In conclusion, TSRERA has directed the builder to refund the remaining advance money paid by the homebuyer, along with interest. Additionally, TSRERA has directed the builder to forfeit the booking amount received from the homebuyer.

Case : Sri Bharatha Raveender Vs M/s Krithika Infra Developers

Citation : COMPLAINT NO.1684 OF 2023

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