Q. Is there any time limit within which a buyer must cancel his agreement for sale to be entitled for refund of stamp duty? Should there necessarily be a default on the part of the builder to be entitled for refund?
Rajendra Rane, Borivali (West)
A. The answers to your questions can be found in the Maharashtra Stamp Act. Where an agreement for selling an immovable property on which stamp duty is paid is registered and thereafter such agreement is cancelled by a registered cancellation deed within five years from the date of execution, the person concerned is entitled to claim the refund (Section 48 (1) of the Stamp Act). However, there is a further time limit. The application for refund has to be made within six months from the date of registration of the cancellation deed (Section 47 of Stamp Act).
To be entitled for such refund, there need not be any default on the part of the builder. It is quite possible that after executing the agreement for sale, the buyer is transferred from, say, Mumbai to Gurgaon. He can cancel the agreement for sale and rightfully claim a refund. In short, the cancellation of agreement for sale can be for any reason.
Q. I booked a flat in Pune and executed an agreement for sale in March 2023 for a total consideration of Rs 1.1 crore. Now the builder is asking for a 5% price hike on the grounds that the cost of labour, raw material, etc, have gone up. However, he has not given me a formal letter to that effect in spite of my specific request. But he is also indirectly threatening me that he will cancel the booking if I don’t agree. Can the builder demand such escalation? And if I refuse, can he cancel my booking?
Prashant Kashalkar, Kothrud, Pune
A. Prior to the coming into effect of RERA, it was a common practice of many builders to hike the flat prices in the name of increase in cost of raw materials etc. However, post RERA, builders are required to offer escalation-free prices.
The model agreement prescribed under RERA says: “The total price is escalationfree, save and except escalations / increases due to increase on account of development charges payable to the competent authority and / or any other increase in charges which may be levied or imposed by the competent authority, local bodies / government from time to time.”
The very fact that the builder has not given you any formal letter informing you of the escalation shows that he knows it too well that he cannot make such a demand. However, in the worst case scenario, if the builder dares to cancel the agreement, you need to immediately approach MahaRERA. It is also pertinent to note that as per Section 11 (5) of RERA the builder can cancel the allotment only in terms of the agreement for sale. And since the agreement for sale does not give the builder any right to demand such an escalation, he cannot cancel the allotment.
Advocate Shirish V Deshpande is chairman, Mumbai Grahak Panchayat. Queries may be sent to shirish50@yahoo.com
