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MahaRERA allows developer to deduct 2% of value of flats on cancellation of bookings

The order was passed on September 12 after MahaRERA found no merits in the contentions raised by homebuyers seeking refund with interest under Section 18 of the RERA Act.

L&T Realty had contended that the booking was made when Maharashtra Ownership Flat Act was under force in 2017. (Representational)

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has allowed developer L&T Realty Limited, which had executed the residential Crescent Bay-T2 project in Mumbai’s Parel, to deduct 2 per cent on consideration of two flats worth Rs 3.28 crore in connection to a refund sought by the homebuyers who cancelled their bookings.

The order was passed on September 12 after MahaRERA found no merits in the contentions raised by homebuyers seeking refund with interest under Section 18 of the RERA Act. Instead, it accepted the submissions made by the developer – through advocate Manish Gala – that it had called the homebuyers to execute the sale, since the date of booking from 2017 till 2019, but did not receive a reply.

Therefore, the MahaRERA said that prima facie there was no violation of Section 18 by the developer, leading to the rejection of the demand of the homebuyers.

The MahaRERA, in the absence of agreement of sale documents, had admitted forms signed by the parties at the time of booking. Among various clauses and conditions, one condition put forth by the developer was that it will be entitled to forfeit 5 per cent of the total consideration amount.

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In the order, the MahaRERA mentioned that such forfeiture clauses are unreasonable after commencement of RERA and also not in consonance with the order issued in August with respect to the prescribed format of allotment letter that permits the developer to forfeit 2 per cent in case the buyer cancelled the booking.

The MahaRERA pointed out that the settled principle for cancellation of booking (before the execution of agreement for sale is executed) has been prescribed by such a order. And, since this project is registered with MahaRERA, the order can be applied while deciding similar cases on merits.

According to the complainants — homebuyers Vinay Jain, Vimla Jain and Priya Jain — they had jointly booked the flats in the Crescent Bay project and approached the MahaRERA seeking refund with interest and compensation under sections 12, 13, 14 and 18 of the RERA Act.

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The homebuyers had made a written submission stating that the developer offered them reduced carpet area. They added that possession of flats was offered in 2019 by the developer without obtaining Occupation Certificate from the competent authority. However, the homebuyers failed to prove their allegations, MahaRERA said in its order.

For instance, the homebuyers had claimed that the developer violated the Section 12 of the RERA Act by giving false and misleading information. The section provides that homebuyers can seek refund along with interest and compensation if the allottee (homebuyer) makes any deposit based on the information provided in notice/advertisement and sustains any loss or damage due to the false information. However, in this case, the homebuyers failed to present any such brochure or document to MahaRERA.

L&T Realty had contended that the booking was made when Maharashtra Ownership Flat Act was under force in 2017. Further, it had said that the change in the area of the flat was a result of a change in the methodology of calculation of carpet area as per standards laid down by RERA.

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“Clause 5 (c) of the booking application form clearly stipulated that any variation in carpet area within a cap of 3 per cent in the flat is accepted and confirmed by the parties and hence, respondent is not liable to make any payments…,” the developer had submitted.

First published on: 17-09-2022 at 23:23 IST
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