MahaRERA has ruled that developers can deduct cancellation charges from a flat booking amount if the charges are disclosed in the project's approved cancellation policy. The decision came after a homebuyer cancelled a booking within two days and sought a full refund.
Background of the Case
According to the complaint, the homebuyer booked a 2 BHK apartment in May 2024 priced at approximately ₹89.86 lakh. At the time of booking, the buyer paid ₹1 lakh as the booking amount and was issued an allotment letter on the same day.
However, within two days of the booking and before the execution or registration of any Agreement for Sale, the buyer decided to withdraw from the transaction. The buyer informed the developer via email that due to financial constraints and uncertainty regarding approval of a home loan, he would be unable to proceed with the purchase.
The buyer argued that since the cancellation occurred almost immediately after booking and before any formal sale agreement had been executed, the entire booking amount should have been refunded without any deductions.
Developer Deducted Cancellation Charges
Despite the early cancellation, the developer deducted ₹89,861 from the booking amount as cancellation charges and refunded the remaining amount. The buyer subsequently approached MahaRERA seeking a direction for a complete refund of the ₹1 lakh booking amount.
The developer defended the deduction by stating that the cancellation charges were imposed strictly in accordance with the project's established cancellation policy. The policy had been disclosed through a deviation report filed on the MahaRERA website, making it publicly available to prospective buyers.
MahaRERA's Findings
After examining the records and submissions of both parties, MahaRERA concluded that the developer's action was consistent with the disclosed terms and conditions governing cancellations. The authority observed that the deduction was not arbitrary and was supported by the cancellation policy already available on the regulatory portal.
As a result, MahaRERA rejected the homebuyer's demand for a full refund and upheld the developer's right to retain the specified cancellation amount.
Key Takeaway for Homebuyers
The ruling serves as an important reminder for prospective homebuyers to carefully review a project's booking terms, cancellation policies, and disclosures available on the MahaRERA portal before making any payment.
Even if a booking is cancelled shortly after reservation and before the signing of a formal Agreement for Sale, refund eligibility may still be governed by the cancellation policy accepted at the time of booking. Buyers relying on home loan approvals should ensure financial arrangements are sufficiently clear before committing to a property purchase.
Industry Impact
Real estate experts believe the decision reinforces contractual transparency and highlights the importance of regulatory disclosures. Developers who clearly disclose cancellation terms through approved channels may receive regulatory protection when enforcing such provisions, while homebuyers are encouraged to conduct due diligence regarding refund and cancellation clauses before finalizing bookings.
The ruling is expected to serve as a reference point in future disputes involving booking cancellations, refund claims, and developer disclosure obligations under the Real Estate (Regulation and Development) Act (RERA).
