Q: I recently received possession of my flat. As per the agreement, the carpet area was 500 sq ft. However, my architect measured it and found that it is 490 sq ft. I purchased the flat at ₹28,000 per sq ft and paid ₹1.40 crore, besides stamp duty and registration charges. I asked the developer to refund ₹2,80,000 for the 10 sq ft shortfall. However, he refused, saying MahaRERA permits a plus/minus 3% variation and that a refund is payable only if the shortfall exceeds 3%. Is this correct? What legal remedy do I have, or should I accept the shortfall? —– Jacquline Miranda, Mira Road
A: Your developer’s interpretation is incorrect. To understand whether a plus/minus 3% variation is permissible without compensating the allottee, consider Clause 1(g) of MahaRERA’s Model Agreement for Sale.
It reads, “The promoter shall confirm the final carpet area that has been allotted to the allottee after the construction of the building is complete and the occupancy certificate is granted by the competent authority, by furnishing details of the changes, if any, in the carpet area, subject to a variation cap of 3%. The total price payable for the carpet area shall be recalculated upon confirmation by the promoter. If there is any reduction in the carpet area within the defined limits then the promoter shall refund excess money paid by the allottee, within 45 days with annual interest at the rate specified in the rules, from the date when such an excess amount was paid by the allottee. If there is any increase in the carpet area allotted to the allottee, the promoter shall demand additional amount from the allottee, as per the next milestone of the payment plan. All these monetary adjustments shall be made at the same rate per square metre as agreed in clause 1A of this agreement.”
If there is any reduction in the carpet area within the defined limits, the promoter shall refund the excess money paid by the allottee. “Within the defined limits” means within the plus/minus 3% variation. Even a 1% or 2% shortfall requires the developer to refund the excess amount paid.
In your case, the final carpet area is 490 sq ft instead of the agreed 500 sq ft, amounting to a 2% negative variation. At ₹28,000 per sq ft, the developer must reimburse ₹2,80,000 for the shortfall.
The developer must confirm the final carpet area after construction is completed and the occupancy certificate is granted. If the area is less, the excess amount must be refunded within 45 days.
The refund must carry MahaRERA-prescribed interest: the marginal cost of funds-based lending rate, or MCLR, plus 2% per annum. Interest is payable from the respective dates on which the excess payments were made.
Accepting the developer’s interpretation would allow builders to misuse the 3% variation clause and make windfall gains at the homebuyer’s expense. The clause does not describe this as a “3% permissible variation”. It uses the words “variation cap of 3%” and provides for financial adjustment in favour of the party that benefits.
Thus, the 3% plus/minus variation is not a free allowance permitting builders to provide less area without compensation. Even differences of 1% or 2% must be adjusted financially between the parties.
If the developer refuses to refund, you may file a complaint before MahaRERA seeking the amount with interest. Alternatively, you may approach the Maharashtra State Consumer Disputes Redressal Commission under the Consumer Protection Act, alleging “deficiency in service” and “unfair trade practice”.
(Advocate Shirish V Deshpande is chairman, Mumbai Grahak Panchayat. Queries can be sent to him on email: shirish50@yahoo.com)
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