You found your dream home and have paid the developer your booking amount. However, there can be unforeseen circumstances that may require you to cancel or postpone your desire to buy a property. So, what do you do? 

Can you get the cancellation of the flat booking amount back? The short answer is ‘Yes’. 

In India, all real estate properties and transactions fall under the regulatory body known as RERA. If there are any discrepancies, then the Authority can levy penalties and punishments for both agents and builders. In a major relief for homebuyers, the Supreme Court stated that developers cannot deduct more than 10% of the sale price of an apartment when the buyer cancels the booking. 

But what are the RERA rules for refund of booking amount from your developer? Let’s take a look at how to get a refund of your booking amount from the developer.

How to Get the Refund of Your Booking Amount as per RERA?  

In times when a developer or builder refuses to repay the booking amount, a buyer can take the following steps to get their refund back. 

1. Check the written document

If you have a written agreement signed with the developer, then check the clauses for the refund of the booking amount. This document will help you understand the refund policy the developer follows. 

2. Communication

Start by setting up a written line of communication, such as mailing the concern and requesting a refund from the developer to the registered email ID.  State your reasons for wanting the refund and offer any documents to support your reasoning. 

3. Send a legal notice

If your developer does not respond to your communication, then you can send a legal notice from your lawyer. The notice can mention the problem and request that the money be refunded within the specified timeframe. 

4. Approach the consumer forum

Even after you send a legal notice and the developer still does not repay the money, you can file a complaint with the consumer forum. Remember to add your relevant details and documents to support your case. 

5. Take legal action

If, after taking all these steps, the developer still does not refund your money, then it is time to take legal action. Talk to your lawyer and proceed with legal proceedings through the civil court or RERA. 

Pro Tip: When planning to buy a home, it is best to go with an expert developer/real estate partner who specializes in building smart investments. 

What are the RERA rules for refund of booking amount? 

A potential homeowner has every right to cancel a property deal, as per RERA. In such cases, according to the authority, the developer needs to refund 100% of the booking amount that the buyer provided. 

For example: If the deal is cancelled due to the developer’s inability to deliver the project on time, then the entire booking amount as per RERA has to be refunded within 45 days of said cancellation. 

As per RERA, if a developer fails to pay back the refund money on time, then they can be subject to additional interest. However, if the buyer cancels the booking within 45 days of receiving the allotment letter, through no fault of the developer, then, as per the rules, the developer has the right to deduct a nominal amount as a penalty from the booking amount prior to refunding it to the buyer. 

What is the penalty for cancellation of a flat booking before agreement under RERA?

The RERA rules state that a builder can only deduct around 2% of the booking amount if the buyer backs out of the deal within 45 days of receiving an allotment letter. Previously, developers could charge 10% of the total property cost as a penalty for cancelling an ongoing deal. However, to protect the buyer's interest, the penalty amount has been significantly reduced. 

If the buyer cancels his booking, will his stamp duty be refunded as well? 

The Stamp duty refund rules are different in each state. As per the Indian Stamp Act of 1899, the stamp duty refund can only be claimed within 6 months from the date it was paid. Only 10% of the total stamp duty paid will be deducted, and the remaining amount can be refunded.  

Conclusion

Buying a home is a dream for most people. As per the RERA rules, if a seller has the right to take a booking amount when a buyer is planning to purchase a property, then the buyer has the right to get a refund of the same amount. If a developer refuses to return the money, then a buyer can reach the RERA for any issues. They have a grievance redressal policy of 60 days, in which the buyer can get a respite. If the developer still does not comply with the final order from RERA, then they might face strict penalties. 

FAQs

1. Will the homebuyer get their GST amount back if they cancel an under-construction project? 

When you cancel an under-construction project, the developer can keep the booking amount and refund the instalment. However, the property buyer will not get the GST back as it is towards the service that has already rendered, and so it cannot be refunded. 

 2. Can I get my booking amount from the developer? 

As per RERA, if you cancel a booking of a property, through no fault of the developer, then they can deduct a reasonable amount as per the agreement. But if the cancellation is due to a delay in the project, then the buyer can get a full refund without any deductions. 

3. Is the pre-booking amount refundable? 

If you cancel a booking, then the pre-booking amount you have paid prior to payment of the booking amount will not be refunded. 

4. What to do when a developer does not refund the booking amount? 

If a developer does not refund the money, then you need to document the entire communication process and request a refund. If they still do not pay back, then issue a formal notice. In case that does not work, then file a complaint with RERA or a consumer court.