RISKY REFUNDS!

When Bhavesh Patel booked his dream home with an upcoming project near S G Highway, Ahmedabad, he wasn’t expecting anything to go wrong!

When he invested, he didn’t see what was going hinder possession of his dream home. The slowdown in the economy has directly and/or indirectly affected the real estate market greatly.

Thus, as expected, the project he invested in got shelved. The result – indefinite delays, loss of money and not to forget the frustration he is going through.

This is the story of thousands of people who are left helpless and frustrated because of delays. The worst thing is that they do not get any refunds on the hard earned money they have paid for their dream home! There hasn’t been one day Bhavesh has not followed up for his refund … or tried to meet the builder. Unfortunately, that does not seem to be working.

When stuck in such a situation, there is hardly anything one can do. One – court case; Two – out of court settlement by networking with similar victims; Three – Accept the delay; Four – cancel the booking and claim for a refund.

Most people prefer the last option for obvious reasons. The catch is that there is hardly a case where the full amount of the deal is returned.

What is becoming a matter of great concern is that there is no law – no norm which binds such refunds of cancellations. The amount refunded eventually varies from builder to builder. Refunds basically depend on three factors—developer's agreement, reason for requesting the refund and the market situation. 

So, what does one do?!

Builders tend to ‘charge’ more money in the name of ‘registration’ by demanding Rs 10,000-50,000 to facilitate the process. This is besides the stamp duty and legal registration costs.

The law, on the other hand, has no rules and laws for this and it is universally agreed that once signed, one is legally bound to follow the agreement.

To avoid getting stuck, it is recommended to pay the booking amount by cheque rather than cash. This will ensure receipts.

Another handy tip is to approach the builder with a valid reason for backing out of the property and claiming the refund. It is found that developers are more open to humanitarian grounds rather than other things.

Most importantly, one must be very careful of the agreements and papers and their authenticity. These must be clearly read and verified.

If your builder is unable or is not refunding your booking amount, you can request shifting to a complete project by the same builder. Many people are accommodated in this manner.

If you’re heard the phrase ‘majority wins’, you can make the phrase work in your favor too! Look around for people in a similar state and negotiate hard as a group.

The bottom line: when it comes to refunds, there are no rules and you'll have to fight it out with the builder. But if you do your homework well, you can give a good fight.

Here are a few handy tips, from various sources of the internet, to keep you safe from such traps --

• Familiarize yourself with the sale deed before going to developer.
• Give a good reason for withdrawing from a project; financial problems work best.
• Consider shifting to another property by the same builder.
• Network with other buyers in the same project.
• Ask the developer for a written document specifying the deduction.
• Don't pay cash while booking the property and ask for a receipt. Use cheques.