MahaRERA’s model allotment letter will help both buyers and builders: Experts

The model allotment letter has provisions to mention date of possession, amount to be deducted in case of cancellation of booking by flat buyers. Representation pic

In a bid to bring in uniformity and safeguard the interest of flat buyers as well developers, the MahaRERA has come up with a model allotment letter which developers need to adhere to. The allotment letters would vary from developer to developer. Professionals have welcomed the move.

The allotment letter "prescribes the minimum period within which the booking can be cancelled and the upper limit of the percentage of the amount to be deducted in case the allottee desires to cancel the booking. The promoter may increase the number of days within which the booking can be cancelled as well as decrease the percentage of the amount to be deducted in the event of cancellation of booking." Developers need to upload the allotment letter or the amended form of the allotment letter at the time of applying for registration of the real estate project. Also, in case of non-compliance of the same, the application for registration of the project shall be liable to be rejected.

Also Read: Cases pile up before MahaRERA as state is yet to fill vacancies

Expert view

Chartered Accountant Ramesh Prabhu of Maharashtra Societies Welfare Association said, "The introduction of draft allotment letters by MahaRERA is a great initiative for the protection of allottees rights across India. Till date promoters used to make their own draft of allotment letters. Many promoters used to get the application for reservation of flats by mentioning arbitrary and one-sided terms and conditions. The draft allotment letters bring clarity in most of the financial transactions between the parties."

"The letter will have particulars like date of possession, amount to be deducted if allottees cancel booking which cannot exceed more than 2 per cent of the cost of the flat. The consideration amount with descriptions of property is also incorporated. This will reduce litigation between parties," said Prabhu.

Advocate Godfrey Pimenta, who practises in MahaRERA, said, "The recent circular issued by MahaRERA with regards to standardising letter of allotment is a welcome step. The allotment letters in the past have created issues as date of possession was mostly not mentioned, and there was unreasonable forfeiture clause."

Advocate Vinod Sampat said, "There are instances where tenanted premises are being redeveloped, and existing tenants pay extra amount for buying additional area. Unfortunately, the allotment letter prepared by MahaRERA authorities has failed to consider such projects. I feel that the MahaRERA needs to look into the same." He added that the maximum deduction of 2 per cent in case of cancellation should be implimented by builders.

Mid-day Impact

Following mid-day's report on June 3 on rejig of the MahaRERA website wherein lawyers and chartered accountants were quoted as saying that the way projects were listed earlier helped flat buyers make an informed decision, the real estate authority has now restored the same.

"The reintroduction of the decided complaints against the registered project is a welcome move," said Prabhu. "The restoration of orders under respective real estate projects will immensely benefit the ordinary home buyers to make informed decisions," Pimenta said.