In this article, I will share with you how you can cancel a flat booking after signing the agreement with the developer. The reason can be anything, and the law allows us to do so. But let me tell you, you will not get the whole amount as a refund. They will cut some percentage of it as a penalty, but sill their process will help you get your money back, most of it.
Here are some common reasons that people use to cancel a flat booking and those are:
- Lack of money to invest
- The bad reputation of the developer
- The apartment is not good enough
- You have changed your mind
How to Cancel A Flat Booking Step by Step
When you purchase a flat from a developer, they will tell you to sign a Token or contract. When you have paid the initial amount to book the flat, about 1% – 2% of the total value of that flat, and they will start the paperwork to help you with the possession.
You pay the down payment as they need from you, and then slowly, you will become an owner of that flat. That is the whole process of a flat booking.
If we talk about the down payment, it’s 10% – 20% of the total value that every developer will ask from you. Otherwise, they will not start the work to deliver the house.
After the down payment, your flat will get registered by the sub registrar’s office, and you will become an owner of that apartment, and the whole about you will pay it via the EMI process.
Remember Down payment and Token money are different, One for booking and one for buying. Both are required to purchase a house.
How Much They Will Charge You for Cancellation
The developer will not return the whole amount you gave them. You have to leave some of it as written in the contract. For example, if you cancel the booking, you need to pay $5,000 or $10,000, as the contract says.
Research says they will charge you up to 10% of the total value of the flat to cancel it. Although, it varies in every country.
Note that you will not get a refund for any Government work like taxes and other paper documents that are required to register the flat by your name. You have up to 90% of the value as a refund.
If you purchase a flat of $100,000 and if they charge you 10% of it. Still, you have $90,000 cash in your hand. You can reduce it by negotiating via your agent.
The Developer Will Never Force You
If you think the developer will force you not to cancel the flat booking then you are wrong. They can not force you, as the law says. Plus they have to maintain their reputation in order to sell houses in the market.
Reputation is everything in this business. Otherwise, people will not come to them to purchase their homes. That’s why they will never force you to do anything you do not want.
Remember, you are a customer in power. The law will protect you at any cost. They will refund your money as the contract says. But, don’t do anything funny. If you do, they will punish you, and you may lose more money because of it. Do it politely, and don’t damage their business and reputation. They will be happy to help you.
Visit the Real Estate Authority Website for Any Complain
If you have any problems regarding your refund, you can complain to your State’s Real Estate Regulatory Authority. If your complaint has some valid points, they will help you get the refund money from the developer as soon as possible. This applies to under-construction properties.
If you are dealing in resale properties you will face him in court to get your refund money, and you know how the system works. It may take years to solve those issues. Better you negotiate with the seller and try to get the refund money, not in full but some of it. Don’t go for a lawsuit you will suffer more. Use your brain and cancel a flat booking clearly.
Flat Agreement Registration is Required
You must have a copy of the registered agreement and the payslip before you apply for the refund. Every time you make a payment to the developer, make sure you receive a receipt. That will help you in the future.
Never sign the agreement before reading it carefully. If you think the cancellation charge is too high, request to reduce it. It all comes to the agreement, a registered agreement, no registration of the agreement, no refund.
Hire A Real Estate Attorney Before Making A Move
I have shared the basics of canceling a flat. You must visit a legal expert to know all the details based on the state you live in, the country, and the current situation there. In every country, there are some rules and regulations that you need to follow before you apply for a refund. Otherwise, it might backfire on you. So be careful while requesting a refund.
An Extra Tip on Cancellation of Flat Booking
First, don’t cancel it the right way. Because the problems you are facing, can be solved, it happens all the time. People get angry and cancel it the right way. Find a solution for it. If there is nothing to solve, then you can apply for cancellation.
I strongly suggest you think twice before you cancel a flat booking. If you are having any financial problems, ask someone for some money, any family issues solve them politely, or any disagreement with the developer, solve it with your agent in peace. Canceling a flat booking will not help you. It will make things worse for you. You might regret it later.
So, this is how you cancel a flat booking and get a refund in months. If you have any questions, let me know in the comments. Share his information with someone who might need a helping hand in canceling the apartment booking. Thank you for your time.