MahaRERA orders real estate developer Godrej to refund part of forfeited amount to homebuyer

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed Godrej Greenview Housing Private Limited of the Godrej Properties to deduct only 2% instead of 5% and refund the balance amount to a homebuyer who had booked and canceled booking of an apartment worth Rs 92 lakh in Godrej Emerald project in Thane near Mumbai.

The homebuyer, Ajit Dabhade, had initially booked a flat worth Rs 92.17 lakh in June 2019, paying an earnest amount of Rs 5 lakh. However, due to issues securing the promised loan for stamp duty and registration, Dabhade decided to cancel the booking. Subsequently, Godrej Properties forfeited the entire amount paid by Dabhade.

In response to Dabhade's complaint, MahaRERA directed the developer to deduct only 2% of the total consideration value of the flat, amounting to a refund of the balance to the homebuyer.

Dabhade alleged that he did not receive the promised loan amount in full, which hindered his ability to proceed with the purchase. Despite the developer's offer of an amnesty scheme in 2021 to mitigate the delayed interest, Dabhade opted for cancellation, prompting the forfeiture by Godrej Properties.

Also read: Delayed possession: Homebuyer can take possession and later claim for interest from developer, says Bombay HC

MahaRERA's ruling, issued on March 11, 2024, deemed the forfeiture of the entire amount by the developer as not legal, citing provisions under the Real Estate (Regulation and Development) Act, 2016 (RERA).

The authority clarified that while the booking application form allowed for forfeiture of up to 5%, the action taken by Godrej Properties exceeded the legal limit.

"The developer while terminating the said booking has forfeited the entire amount paid by the homebuyer, which is more than 5% of the total consideration value of the said flat. Such forfeiture has been done by the developer as per clause of the booking application form dated 22-06-2019. However, such forfeiture by the developer (which is more than 5% of the total consideration of the said flat) is not legal and proper as per the provisions of the RERA," the MahaRERA order said.

Also read: MahaRERA orders developer to deduct 2% , not 10%, of the price of apartment for cancelled booking

Furthermore, MahaRERA upheld its earlier order from August 2022, permitting a maximum forfeiture of 2% in cases of cancellation by homebuyers. The authority emphasized that its directives are applicable retrospectively to registered projects, including Godrej Emerald.

Consequently, Godrej Greenview Housing Private Limited has been instructed to refund the amount paid by Dabhade, minus 2% of the total flat value, within 45 days from the issuance of the order.

An email query sent to Godrej Properties  for comments did not elicit a response.