Response

The introduction of the new RERA (Real Estate Regulation and Development) Act, 2016 it will enable the homebuyers to exit real estate deals smoothly. The RERA empowers the homebuyer to cancel an allotment of the apartment booked with a builder at any stage even if there is no default on the part of the developer. It binds the builder to return the money collected from the buyers within 45 days of such cancellation after deducting the booking amount.

The booking amount shall be forfeited by the developer. The Act has clearly stated that the booking amount shall be forfeited and instructed the builder to return the balance amount within 45 days. It shall be forfeited by the developer in every case as the seller has to suffer losses if the deal has been cancelled by the buyer. These charges are determined by the State Governments of every state and they differ accordingly.

The rules for refund of the stamp duty would vary from state to state. As per the Indian Stamp Act, 1899 refund of stamp duty can be claimed within 6 months from the stamp duty paid and it will be refunded after deducting 10% of the total stamp duty paid.

If the buyer wants to cancel the booking and thus, surrender his rights over the under-construction property, the builder may agree to refund the booking amount and installments paid, or even agree to pay a higher amount to the buyer, depending on the demand and supply dynamics at that time. The builder will not be entitled to claim any refund with respect to the GST, as he has already rendered services to the buyer.

You must send a legal/demand notice to the builder claiming the amount. If he fails to pay back within stipulated time, you must file a recovery suit against him in RERA or civil court. Even if the contract is not notarized, it is signed by both the parties and is valid.

Reference: Real Estate (Regulation and Development) Act, 2016. Indian Stamp Act, 1899.

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