MahaRERA has directed L&T Realty to refund the deposit amount paid by an NRI homebuyer from Abu Dhabi. The buyer had booked a flat in L&T's Emerald Isle - T10 project located at Kurla in Mumbai by paying INR 25 lakhs as 10.5% of the total cost of INR 2.29 crore. However, the transaction could not be completed after the bank subvention scheme was discontinued, leaving the buyer unable to pay further amounts. L&T cancelled the booking and offered to refund INR 17 lakhs after deducting over INR 8 lakhs. But MahaRERA ruled that L&T can only deduct 2% of the flats value from the deposit amount, maintaining consistency with its earlier order involving Godrej Properties.
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed Larsen & Toubro (L&T) to refund the deposit amount paid by a homebuyer from Abu Dhabi while hearing a complaint against L&T Realty. This is the second such ruling where MahaRERA has allowed a developer to deduct only 2% of the total value of the flat from the paid amount.
The non-resident Indian (NRI) buyer had booked a flat in an L&T Realty project named Emerald Isle - T10 located at Kurla in Mumbai. The person paid INR 25 lakhs as deposit of the total cost of INR 2.29 crore. However, L&T later cancelled the booking due to non-payment of the remaining amount. L&T offered to refund INR 17 lakhs after deducting over INR 8 lakhs, as agreed in the settlement terms before the MahaRERA Conciliation Forum.
However, MahaRERA directed L&T to deduct no more than 2% of the flat?s value from the deposit paid during termination of the booking. The buyer, based in the United Arab Emirates, had booked the flat in March 2018 after receiving an allotment letter. The INR 25-odd lakh the buyer paid constituted 10.50% of the total cost. But the transaction could not be completed as the bank subvention scheme was discontinued, leaving the buyer unable to pay further.
A subvention scheme is where there is a three-way agreement between the developer, buyer and the bank where the buyer pays up to 10% of the cost and the rest is borne by the bank, and equated monthly installments (EMIs) begin after possession of the property is handed over.
At a previous MahaRERA meeting, L&T said it could refund INR 17 lakhs but the buyer disagreed with the amount. The buyer also cited COVID-19 for his inability to come to India and sign the sale agreement. He denied insufficient funds, claiming he had enough to make payments, but since the agreement for sale was not executed, he was under no obligation to make payments to the developer.
MahaRERA observed that the buyer had avoided timely payments and had failed to satisfactorily explain why he had not paid stamp duty and registration charges for execution of the agreement for sale despite the developer's reminders in June 2019. Considering the buyer wanted a refund, MahaRERA ruled that L&T must return the entire amount paid, minus a 2% deduction, without any interest. This order maintains consistency with MahaRERA's earlier ruling involving Godrej Properties.
Recently, MahaRERA had directed Godrej Greenview Housing Private Limited, an arm of Godrej Properties, to deduct only 2% and refund the balance amount to a homebuyer who had booked and cancelled an apartment with a price tag of Rs 92 lakh in the Godrej Emerald project in Thane near Mumbai.
By limiting the refund deduction, MahaRERA has protected the interest of homebuyers and also made it clear to the developers that the rule is well established. This consistent approach establishes MahaRERA as an effective regulator, balancing the needs of developers and homebuyers.
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