MahaRERA Directs Godrej Real Estate Developer to Partially Refund Forfeited Payment to Homebuyer

April 8, 2024

Experts Opine: Ruling Could Trigger More Refund Demands for Real Estate Developers as Forfeited Amounts Cross Legal Limits

The Maharashtra Real Estate Regulatory Authority has instructed Godrej Greenview Housing Private Limited, a branch of Godrej Properties, to reduce its deduction from 5% to 2% and reimburse the remaining sum to a homebuyer.

This individual, Ajit Dabhade, had initially booked a flat valued at Rs 92 lakh within the Godrej Emerald project situated in Thane near Mumbai. In June 2019, Dabhade placed an earnest payment of Rs 5 lakh for the booking. However, complications arising from the inability to secure the promised loan for stamp duty and registration prompted Dabhade to cancel the reservation. Consequently, Godrej Properties forfeited the entire amount paid by Dabhade.

Following Dabhade’s Complaint, MahaRERA issued a directive to the developer, stipulating a mere 2% deduction from the flat’s total consideration value, thereby mandating a refund of the remaining sum to the homebuyer.

Dabhade contended that he hadn’t received the full promised loan amount, impeding his ability to proceed with the purchase. Despite the developer’s proposition of an amnesty scheme in 2021 to alleviate the accrued interest, Dabhade chose cancellation, resulting in the forfeiture by Godrej Properties.

MahaRERA’s ruling, issued on March 11, 2024, declared the developer’s forfeiture of the entire amount as unlawful, referencing provisions within the Real Estate (Regulation and Development) Act, 2016 (RERA).

The authority clarified that although the booking application form permitted forfeiture of up to 5%, Godrej Properties’ actions exceeded the legal threshold.

“The developer terminated the booking and forfeited the entire amount paid by the homebuyer, which surpasses 5% of the total consideration value of the flat. While such forfeiture was executed in accordance with the clause of the booking application form dated 22-06-2019, it contravenes the provisions of RERA,” stated the MahaRERA order.

Additionally, MahaRERA reaffirmed its previous ruling from August 2022, affirming a maximum forfeiture allowance of 2% in instances of homebuyer cancellations. The authority stressed that its directives are retroactively applicable to registered projects, including Godrej Emerald.

As a result, Godrej Greenview Housing Private Limited has been directed to reimburse the sum paid by Dabhade, minus 2% of the total flat value, within 45 days of the order’s issuance.

Posted and reproduced in Public Interest by

Adv. Sulaiman Bhimani Legal Consultant

Expert in RERA & Consumer Matters,

Co-operative Scty Matters, Deem Conveyance,

Family Matters, and Property Disputes.

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