How many times does it ever happen that you bought something really expensive and end up realizing it isn’t good enough or perhaps you shouldn’t have invested your money in it at the first place? May be a couple of times!
We understand that each and every penny that you earn matters the most. That’s why you shouldn’t take hasty decisions, especially when it comes to investing in a property.
It takes a lot of time, efforts and hard work for an individual to save a huge amount of money to buy his dream home.
For an instance, if a person wants to buy a flat in Delhi, at first, he will google “flats in Delhi”, then he will do his due-diligence, may be contact a few realty agents as well. In this way, owning a property is not an easy process to follow.
But in some cases, the buyers might be forced to end their home-purchase journey abruptly.
While majority of the flat booking cancellation instances occur due to buyers reconsidering their financial capabilities, another common reason is unnecessary project delays.
Usually, a flat booking cancellation is done by a buyer when either the builder is not fulfilling his obligations to complete the work on time or the builder is having financial difficulties. In such situation, it is advisable to take professional legal advice to get your money back.
Here’s what you can do when going ahead with the last-minute cancellation decision:
1. Check the cancellation clause
If you want to cancel your flat booking, the first step is to check the purchase agreement and carefully read the cancellation clause. When it comes to the home buying process, a buyer must keep the extra copies of the important documents like builder-buyer agreement, payment receipts etc. so that in case he (the buyer) wants to call off the deal he can follow the legal procedure.
Notably, the cancellation of apartment booking will completely depend on the terms and conditions mentioned in the builder-buyer agreement.
Once you have all your papers in place, then it is the time to inform your builder. In order to keep things clear, send a written letter to the developer.
2. What if you don’t have builder-buyer agreement
Even if you don’t have the builder-buyer agreement, you still have the right to cancel the booking of the flat and can always take the help of RERA or consumer court. Under the Real Estate (Regulation and Development) Act, the developer is entitled to refund the money collected from the buyer within 45 days after deducting the booking amount.
3. Cancellation charges
The developers can deduct cancellation charges when the buyer backs out from the deal. This can be usually 10% of the cost of the apartment. Since there are no legal policies laid down by the government for the cancellation charges, the builders can deduct the amount as per their preferences. However, some builders waive it off in a few cases.
The cancellation charges are usually written in the buyer-builder agreement. So, read it cautiously to find out how much money you are liable to be refunded.
4. Seek legal help
It is always better to take legal assistance if you are planning to exit from the project. A legal expert will be able to help you out with the entire procedure and make sure that you get the full refund from the builder. Moreover, a legal advisor will not only help you with the paperwork but also ensure that you don’t get into a major problem during the whole cancellation process.
Important points to remember
- The buyer has no legal right over the property, until the builder-buyer agreement is registered. Therefore, it is important to keep everything documented and registered.
- Any VAT or service Tax paid by the buyer will not be refunded in case of a cancellation.
- Always pay through a cheque or any other recordable mode rather than dealing in cash
- For every transaction, take receipt from the developer and keep it’s copies safe with you.
- Thoroughly read and analyze the cancellation clause in the property documents and get it change if you think it is heavily in favour of the seller.
- The seller has the right to forfeit the token money. But if the buyer negotiates well, he might be able to get his money back.
- Never rely on verbal promises and always have everything in written.