MahaRERA allows developer to deduct 2% of apartment value when canceling bookings

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has allowed the developer L&T Realty Limited, which had executed the Crescent Bay-T2 residential project at Parel in Mumbai, to deduct 2% from the consideration for two one-bedroom apartments. worth Rs 3.28 crore as part of a refund requested by buyers who canceled their reservations.

The order was passed on September 12 after MahaRERA found no merit in claims raised by homebuyers seeking reimbursement with interest under Section 18 of the RERA Act. Instead, he accepted submissions made by the developer – through lawyer Manish Gala – that he had called homebuyers to execute the sale because
the reservation date from 2017 to 2019, but did not receive a response.

Consequently, the MahaRERA said that on its face there was no breach of Section 18 by the developer, which led to the dismissal of the homebuyers’ claim.

The MahaRERA, in the absence of sales agreement documents, had accepted forms signed by the parties at the time of booking. Among the various terms and conditions, one condition put forward by the promoter was that he will have the right to waive 5% of the total amount of consideration.

In the order, the MahaRERA mentioned that these forfeiture clauses are unreasonable after the start of the RERA and also do not comply with the order issued in August with respect to the prescribed format of letter of allotment which allows the promoter to waive 2% in case the buyer cancels the reservation.

The MahaRERA pointed out that the established principle for the cancellation of the reservation (before the execution of the sales contract is executed) was prescribed by such an order. And, since this project is registered with MahaRERA, the order can be enforced while adjudicating similar cases on the merits.

According to the plaintiffs – homebuyers Vinay Jain, Vimla Jain and Priya Jain – they had jointly booked the Crescent Bay project apartments and contacted the MahaRERA for reimbursement with interest and compensation under Articles 12, 13, 14 and 18 of the RERA law.

The homebuyers had submitted a written quote stating that the developer had offered them a reduced carpet area. They added that the possession of apartments was offered in 2019 by the developer without obtaining an occupancy certificate from the competent authority. However, the homebuyers failed to prove their claims, MahaRERA said in its order.

For example, the homebuyers had claimed that the promoter had violated article 12 of the RERA law by giving false and misleading information. The section provides that homebuyers can seek a refund as well as interest and compensation if the payee (homebuyer) makes a deposit based on the information provided in the notice/advertisement and suffers a loss or damage due to false information. However, in this case, the buyers did not present such a brochure or document to MahaRERA.

L&T Realty had contended that the booking was made when the Maharashtra Ownership Flat Act was in force in 2017. Further, he had stated that the change in floor area of ​​the apartment was a result of a change in the methodology for calculating the the carpet surface according to the standards laid down by the RERA.

“Clause 5(c) of the booking request form made it clear that any variation in carpeted area within a 3% cap in the apartment is accepted and confirmed by the parties and therefore the defendant does not is not obligated to make any payments…”, the developer had submitted.

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