Haryana RERA Upholds Emaar India's Termination Of Flat Booking After Homebuyer Failed To Make Timely Payments

Background Facts

The homebuyer (Complainant) booked a flat in the builder's (Respondent) Palm Gardens project located at Sector-83, Gurugram. Initially, the homebuyer was provisionally allocated a flat with a carpet area of 2444.95 sq. ft. for a total sale consideration of Rs. 1,98,82,512/-. The homebuyer made an initial payment of Rs. 13,00,000/- to the builder.

According to Clause 18(a) of the provisional allotment letter dated September 12, 2018, the builder was obligated to deliver possession of the flat by December 31, 2018. However, the builder did not enter into a buyer's agreement with the homebuyer.

Subsequently, on August 5, 2019, the builder terminated the provisional allocation of the flat, citing non-payment of installments on time. The builder then sold the flat to a third party, which had originally been provisionally allotted to the homebuyer, and forfeited the amount paid by the homebuyer as earnest money.

As a result of this termination, the homebuyer filed a complaint before the authority seeking a refund of Rs. 13,00,000/- from the builder, along with interest.

Observation and Direction by Authority

The authority observed that the homebuyer paid a total of Rs. 13,00,000/- out of the total sale consideration of Rs. 1,98,82,512/-, which is less than 10% of the total amount. Therefore, the builder's termination of the flat does not violate Section 13(1) of the Real Estate (Regulation and Development) Act 2016.

“Section 13 of RERA, 2016, stipulates that a builder cannot accept more than 10% of the cost of a flat without first entering into a written agreement for sale.”

The authority referred to Clause 15 of the application form, which stipulated that in the case of cancellation, the builder would forfeit 10% of the total sale consideration as earnest money.

The authority held that the builder did not violate any provisions of RERA, 2016 by terminating the allotment and forfeiting Rs. 13,00,000/-. The termination occurred because the homebuyer failed to make further payments.

Furthermore, Authority held that since the amount paid by the homebuyer was less than 10%, the builder rightfully forfeited it as earnest money per Clause 15 of the application form. Therefore, the authority dismissed the homebuyer's complaint.

Case – Ashok Bindra & anr Versus M/s Emaar MGF Land Ltd.

Citation - Complaint no: 6345 of 2022

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