by Rezwan Hussain Chowdhury
MahaRERA has been in operation since 2017, and the primary objectives of this agency are to safeguard the buyers’ rights of plots and buildings concerning the quality, price and time of delivery.
MahaRERA has passed a new rule allowing builders to deduct 2% of the value of flats on cancellation of bookings. Before this, the deduction was only 1%.
What is MahaRERA?
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has introduced a new rule that allows developers to deduct a certain percentage of the value of flats from the booking amount if buyers cancel their bookings.
The deduction will be made from the earnest money deposited by the buyers at the time of booking and will be calculated based on the stage of construction of the project at the time of cancellation.
For instance, if a buyer cancels their booking for a flat under construction, they will be eligible for a deduction of 10% of the value of the flat. Similarly, if a buyer cancels their booking for a flat that is ready to move in, they will be eligible for a deduction of 5% of the value of the flat.
This rule has been introduced to protect buyers from losing their entire booking amount if they need to cancel their bookings due to unforeseen circumstances. It will also help developers reduce their losses if there is a sudden drop in demand for their projects.
How does it work?
MahaRERA allows developers to deduct a percentage of the value of flats on cancellation of bookings. The deduction is based on the stage of construction at the time of cancellation. For example, if a booking is cancelled at the completion stage, the developer can deduct up to 10% of the value of the flat.
To encourage developers to comply with the Real Estate (Regulation and Development) Act, 2016 (RERA), the Maharashtra Real Estate Regulatory Authority (MahaRERA) has issued a ruling that allows developers to deduct up to 5% of the value of flats booked under the act, in case of cancellations.
The 5% deduction will be calculated based on the total cost of the flat, including stamp duty and registration charges. This rule applies to all bookings made after 1st April 2017. In case of cancellations before possession, the developer can deduct an amount not exceeding 5% of the total cost from the refundable amount.
Why should developers register with mahaRERA?
When a developer registers with MahaRERA, they can deduct a percentage of the value of flats on cancellation of bookings. This is an excellent incentive for developers, allowing them to offer more competitive prices to potential buyers. In addition, registering with MahaRERA provides developers access to several resources and support services.
MahaRERA allows developers to deduct a percentage of the value of flats on cancellation of bookings. This is an excellent incentive for developers to register with MahaRERA, as it allows them to pass on some of the savings to their customers. In addition, MahaRERA provides a platform for developers to showcase their projects and receive feedback from potential buyers. This helps improve the quality of projects and ensures that buyers get what they expect.
Why should somebody want to cancel their booking?
Many people choose to cancel their bookings for a variety of reasons. Some may have found a better deal elsewhere, while others may have had a change in circumstances that means they can no longer afford the property. Whatever the reason, it is essential to be aware of the implications of cancelling a booking before making a decision.
Under MahaRERA, developers can deduct up to 10% of the value of the flat if a booking is cancelled. If you cancel your booking, you could lose significant money. Therefore, weighing up all the options before deciding to cancel your booking is essential.
What does this affect?
When a real estate developer cancels a booking for a flat, they are now allowed to deduct up to 5% of the value of the flat from the refund that they give to the customer. This change has been made by MahaRERA, the regulatory authority for real estate in the state of Maharashtra, India.
This change will affect customers who have booked flats in Maharashtra and had their bookings cancelled by the developer. The developers will now be able to deduct up to 5% of the apartment’s value from the refund they give to these customers.
What is the 2% deduction that developers can make to compensate for the cancellation of booking by customers?
In Maharashtra, the Real Estate Regulatory Authority (MahaRERA) has allowed developers to deduct two per cent of the value of flats on cancellation of bookings. The deduction will be made from the earnest money deposit (EMD) paid by the customer at the time of booking.
This decision was taken to protect customers’ interests who have been victims of builder defaults. Builders often cancel bookings without refunding the EMD, leaving customers stranded. With this deduction in place, builders will be less likely to cancel bookings, as they will not be able to keep the full EMD.
The MahaRERA order applies to all new bookings made after 1st October 2019. It is a welcome move that will help safeguard the rights of home buyers in Maharashtra.
