Inquiry concerning potential homebuyer's entitlement to a full refund of the booking amount due to job loss situation.
The Latest Ruling on Homebuyer Refunds:
In a groundbreaking move, Maharashtra's Real Estate Regulatory Authority (MahaRERA) has granted a homebuyer a partial refund and allowed him to exit a project due to job loss.
The homebuyer had paid around 10% of the reservation amount for a flat priced at 40.87 lakh INR. Citing unemployment, he requested a withdrawal from the project. The apartment was booked in Godrej Park Greens, a venture by Godrej Features, now being developed as Godrej Horizon Developers in Pune.
In August 2019, the buyer lost his job and faced a severe financial crisis. He informed the developer of his inability to pay the stamp duty and registration fee, but the developer continued to threaten to terminate the booking. The buyer then approached MahaRERA, citing job loss and lack of funds due to COVID-19.
The developer argued that despite being given adequate time, the buyer failed to pay the remaining amount and the government charges for the registration. The developer also claimed that the buyer demanded a more expensive flat than the one allocated.
However, MahaRERA, in its order, ruled that the forfeiture clause in the booking application form/allotment letter was unfair and not in line with current MahaRERA regulations. The order directed the developer to return 4.27 lakh INR (after deducting taxes, statutory dues, and brokerage, if any) to the buyer, waiving 2% of the total booking amount.
In response, Godrej Quality Spokesperson stated, "MahaRERA acknowledged that the buyer had not accused the developer of violating RERA regulations, and in the absence of any offense, the withdrawal/cancellation is governed by the booking application form/allotment letter. However, the developer has appealed the order, and the matter is under appeal in the Appellate Tribunal."
The spokesperson further added, "If this exception is set precedent for job loss, it could lead to endless demands for similar exemptions. Moreover, such a move exceeds the realm of RERA and the power of the MahaRERA Authority."
What's Changed with MahaRERA Rules:
Under MahaRERA's new regulations, developers can no longer arbitrarily retain the entire booking amount if a homebuyer decides to withdraw from a project. Homebuyers are entitled to refunds based on a clear and predefined structure, ensuring protection of their financial investments. Developers must follow specific accountability guidelines to maintain a fair transaction process.
In cases of genuine financial crises, such as job loss, MahaRERA recognizes withdrawals as valid grounds for refunds. However, refunds are governed strictly according to the original terms of the agreement without additional interest if the buyer has defaulted on payments.
Homebuyers should be careful when signing application forms or agreements with stringent forfeiture clauses. Verbal assurances from developers or their representatives carry no legal weight under RERA, and only written agreements and documented clauses are enforceable. If facing financial hardship, homebuyers should document their claims clearly and communicate them promptly to the developer and MahaRERA.
In the updated regulations by MahaRERA, developers are now prohibited from retaining the entire booking amount if a homebuyer wishes to exit a project, opening up opportunities for investors to recoup their funds based on a clear refund structure. This decision by MahaRERA, which also acknowledges job loss as a valid ground for refunds, aims to secure financial investments in real-estate, encouraging more finance in the sector.
