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Builder's Clause Backfires: Dubai Buyer Wins Rs 1.33 Crore.
31 Aug
Summary
- Homebuyer wins Rs 1.33 crore in interest and refund.
- Builder's one-sided clause deemed arbitrary and unenforceable.
- Delayed possession and unmet terms led to booking cancellation.
A Dubai-based Indian homebuyer has successfully challenged a Mumbai builder's arbitrary contractual clause, leading to an order for Rs 1.33 crore in interest compensation and a full refund. The Maharashtra Real Estate Appellate Tribunal (MahREAT) found the builder's clause, which allowed forfeiture of 10% of the purchase price and charged exorbitant interest on cancellations, to be unreasonable and unconscionable.
The homebuyer had booked two flats in Mumbai in 2015, paying approximately 20% of the total cost. However, possession was delayed by over a year beyond the promised April 2017 delivery date. Discrepancies in the draft sale agreement further prompted the cancellation of bookings.
MahREAT's ruling emphasized that such one-sided clauses cannot override a homebuyer's statutory rights under the RERA Act. The tribunal also noted the builder's failure to execute registered sale agreements before accepting payments, a violation of the Maharashtra Ownership of Flats Act, 1963.
This landmark judgment reinforces buyer protections against unfair builder practices. The recent model allotment letter prescribed by MahaRERA limits builder deductions to a maximum of 2% of the unit's cost, underscoring a shift towards more equitable agreements.
