In a significant order reinforcing homebuyer protection, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has ruled that a real estate developer cannot forfeit the entire booking amount paid by a homebuyer if no Agreement for Sale is executed, even if the buyer cancels the booking later. The Authority permitted only a limited deduction of 2% of the flat value and directed refund of the remaining amount.
The order was passed by Ravindra Deshpande, Member II, MahaRERA, in Complaint No. CC005000000116882, decided on January 13, 2026.
Background of the Case
The complaint was filed by Mohammad Iqbal Pathan, a homebuyer, against Xrbia Mirth Properties, the promoter of a residential real estate project titled “Xrbia Singapune”, located at Dhanori, Taluka Haveli, District Pune (MahaRERA Registration No. P52100021752).
According to the complaint, the developer launched the project in 2020 and invited bookings for residential flats. Relying on the developer’s representations, the homebuyer booked Flat No. B-2-213, situated on the 2nd floor of Wing ‘B’, for a total consideration of ₹25 lakh.
Between March 2020 and September 2020, the homebuyer paid a total amount of ₹1,28,954 towards booking. However, no Agreement for Sale was ever executed or registered between the parties.
Cancellation and Refund Dispute
In June 2021, citing severe financial hardship during the COVID-19 pandemic and health issues in the family, the homebuyer requested cancellation of the booking and sought refund of the booking amount through an email dated June 15, 2021.
The developer allegedly refused the refund, stating that the booking amount was non-refundable. Despite a legal notice dated December 17, 2021, no refund was made, prompting the homebuyer to approach MahaRERA seeking refund, interest, and compensation.
Builder’s Stand
The developer opposed the complaint, arguing that:
- The booking amount was non-refundable
- The complaint under Section 18 of the RERA Act (refund due to delay in possession) was not maintainable
- The project had received extensions due to COVID-19 being treated as a force majeure event
- Possession timelines had not yet expired
The developer further claimed that the buyer had defaulted on payment obligations and that the complaint was premature.
MahaRERA’s Findings
After examining the record, MahaRERA noted several key facts:
- The homebuyer had indeed paid ₹1,28,954 as booking amount
- No Agreement for Sale was executed
- The booking was cancelled after about one year
- The developer failed to show any actual financial loss caused by the cancellation
The Authority held that Section 18 of the RERA Act does not strictly apply in the absence of an Agreement for Sale. However, it emphasized that RERA is a beneficial and consumer-oriented legislation, and a promoter cannot act unfairly or unjustly enrich itself by forfeiting money without justification.
Why Only 2% Deduction Was Allowed
MahaRERA relied on its earlier Order No. 35/2022 dated August 12, 2022, which lays down a standard principle for cases where:
- A booking is cancelled
- No Agreement for Sale exists
- The promoter cannot prove actual loss
As per this order, a promoter may deduct only 2% of the total cost of the unit as administrative charges and must refund the remaining amount.
In this case:
- Flat value: ₹25,00,000
- Permissible deduction (2%): ₹50,000
Accordingly, MahaRERA directed the developer to refund the balance amount to the homebuyer.
Final Order
MahaRERA ordered that:
- Xrbia Mirth Properties may deduct 2% of the flat value
- The remaining amount must be refunded within 30 days
- If the refund is delayed, the developer must pay interest at SBI’s MCLR plus 2%
- Both parties shall bear their own litigation costs
Why This Order Is Important
This ruling is significant for homebuyers and the real estate sector for several reasons:
- It clarifies that “non-refundable booking amount” clauses cannot override fairness, especially when no Agreement for Sale is signed
- It reinforces that builders cannot forfeit large sums without proving actual loss
- It standardizes the 2% deduction rule, bringing predictability to pre-agreement cancellations
- It strengthens consumer confidence by reaffirming MahaRERA’s role as a protector of homebuyer interests, even where strict statutory provisions may not apply
Conclusion
The order sends a clear message: booking a flat does not give developers a free hand to retain buyers’ money, particularly in the absence of a formal agreement. While MahaRERA recognizes that builders may incur administrative expenses, it has drawn a firm line against excessive and unfair forfeiture—an important reassurance for thousands of prospective homebuyers across Maharashtra.
Also Read: Homebuyers Can Face Jail Too for Disobeying MahaRERA Tribunal Orders?
