Practice area

Cancellation of allotment and forfeiture of booking amount

Disputes over cancellation of allotments, forfeiture of earnest money and one-sided cancellation clauses.

Promoters sometimes cancel allotments and forfeit large parts of the amount paid, often citing delay in payments by the buyer. Under the RERA Act, a promoter can cancel an allotment only in accordance with the agreement for sale, and an allottee who is aggrieved by a cancellation that is not in line with the agreement can approach the Authority.

What this work involves

• Reviewing the cancellation notice, the agreement and the history of demands and payments
• Challenging wrongful cancellation and seeking restoration or refund
• Challenging excessive forfeiture of booking amount and earnest money
• Disputes about interest on delayed payments, which the Act applies on the same basis to both promoter and allottee
• Advice to buyers who wish to exit a project and to promoters who face payment defaults
• Complaints before K-RERA and appeals before the REAT

Frequently asked questions

Can a builder forfeit my booking amount?

Only in accordance with the agreement, and the amount must be reasonable. A one-sided or excessive forfeiture clause can be challenged before the Authority.

Can I cancel my booking and get a refund?

If the promoter has defaulted, such as by delay, Section 18 gives a right to a refund with interest. In other cases, the agreement's terms and the law on reasonable forfeiture apply.

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