Aiming to bring in transparency and minimize buyer-seller disputes the Maharashtra Real Estate Regulatory Authority (MahaRERA), has standardized the proforma of allotment letters.
As per the newly approved model allotment letter, now, the developer must mention the date of handing over possession of booked property, the percentage of charges levied on cancellation of booking, parking allotment, execution of the agreement on acceptance of 10 per cent of the consideration of the flat amount.
Hitesh Thakkar, a developer from Mumbai and vice-president, NAREDCO West, said this would largely resolve disputes between buyers and developers. “The common complaints raised are that ‘the developer levied this much forfeiture charges’, ‘did not provide the sale agreement’ and ‘the parking allotment information was not clearly mentioned’, among others. All these will stop as the model allotment letter comes into force from now on.”
Similarly, Ramesh Prabhu, chairman, Maharashtra Societies Welfare Association (MahaSeWA), has also welcomed the model allotment letter introduced by MahaRERA. He said, “The MahaRERA has come up with a prescribed format of how the allotment letter should be. Moreover, there was lot of ambiguity like, for instance, earlier, the decided flat cost was not being mentioned but now, as per the model allotment letter, the builder has to mention the value of the property. Besides, the timeline must be mentioned and this further gives an idea to the buyer on arranging funds for the booked property. The allotment letter brings a lot of transparency and standardization in real estate deals.” However, Prabhu pointed out that usually, developers, on the cancellation of a flat booking, charge 10 or 20 per cent of the paid amount. “Now, in the model allotment letter, it is mentioned that after 60 days of cancellation of booking, a developer can only charge maximum 2 per cent of forfeiture fees,” he said.
MahaRERA cases advocate Godfrey Pimenta, also felt that the model agreement would reduce unwanted disputes between the buyer and developer. “The model allotment letter is usually given by the developer if the buyer pays less or up to 10 per cent of the consideration value. Otherwise, the developer and buyer have to sign an agreement of sale. So, the prescribed format of the allotment letter gives a lot of value-added information,” he said.
Prabhu added that henceforth, the developer would have to follow the model allotment letter or face action, as in the MahaRERA, there is a provision that if a developer fails to follow the notification circular issued, then the real estate authority could slap a fine amounting to five per cent of the project cost. The same would be applicable to the developer in the event of their not accepting the model allotment letter format, Prabhu pointed out.