Things to remember when cancelling an apartment booking

Are you aware of the procedure for cancelling an apartment booking? Squarefeet Group explains your rights as a buyer to cancel a booking and claim a refund.

The down trend in the real estate market has had many investors and buyers reconsidering their decisions to buy a property. Often it happens that people eagerly book an apartment but due to certain reasons, are unable to go ahead with the purchase. According to property consultants, while majority of the cancellation instances occur due to buyers reconsidering their financial circumstances, another common reason is unnecessary project delays.

Most people are unaware about the procedure of cancelling an apartment booking. This results in problems while claiming a refund. Prashant Nath from PropertYes De Emirates tells us that there are no rules or conditions laid out by the government regarding cancellation of an apartment or refund of the booking amount. “How smooth your cancellation process goes basically depends on the rapport you have with the developer” says Prashant Nath.

Important things to remember:

• Builder-buyer agreements including sale agreement or property allotment documents usually contain cancellation clauses. Go through the documents in detail as cancellation will be subject to the terms mentioned.
• Always save any acknowledgement document you receive, especially in lieu of a payment.
• It is best to pay through cheques or other recordable mode rather than cash.
• Any VAT or service Tax paid will not be refunded in case of a cancellation.
• Keep all communication in writing. Verbal assurances and promises will not hold in a court if a complaint has to be filed.

Even if no builder-buyer agreement was signed, you are still entitled to cancelling a booking and claiming refund. Experts warn that the reason for cancellation should be a genuine one or else you may get into legal trouble. In the absence of a signed contract or agreement, holding on to allotment letters and receipts of payment are very important. Application forms, acknowledgement or allotment letters may also contain terms and conditions of a cancellation which can be used to claim refund from the builder.

Cancellation charge

Prashant Nath says that it is common for builders to deduct a cancellation charge, usually 10 per cent of the cost of the apartment, before refunding the booking amount. Apart from this charge, any government tax paid by the buyer such as stamp duty, VAT or service tax will also be deducted from the refund. He adds that since there are no guidelines laid down by the government the deduction is done at the builder’s discretion and some builders might even waive it off in some cases.

Legal expert Atulay Nehra tells us that cancellation charges are usually mentioned in the builder-buyer agreement. So, if you have signed such a contract, read it carefully to find out how much money you are liable to be refunded. If terms for cancellation are missing then 100 per cent refund can be claimed from the developer. In case a developer refuses to repay the booking amount even with a clause present in the agreement, the buyer may file a case with the consumer forum asking for a refund with interest.

Seek legal counsel

It is best to seek legal counsel if you are planning to cancel an apartment booking to avoid any glitches later on. A legal expert will be able to help you out with the whole procedure and ensure that you get refunded what you deserve and nothing less. Cancelling an apartment booking involves several official formalities which a lay man might not be well-versed with. Just sending an email to the builder requesting a cancellation is not the best way to go about it. A lawyer can help you out with all written correspondence as well as with filing a complaint in case you feel your rights have been denied in any way. 

You may also contact us at - +91-22-25452903, 66543333 or
Email us at - sales@squarefeetgroup.in 

Source - 99acres.com