India, Oct. 12 -- The Maharashtra Real Estate Regulatory Authority (MahaRERA) has held that a developer cannot forfeit the entire amount paid by a buyer if the agreement for sale has not been executed and the booking is later cancelled. The MahaRERA clarified that in such cases, the developer can deduct only 2% of the flat's cost as cancellation charges.

A homebuyer, Rajesh Singh (name changed), had booked a 2 BHK apartment worth Rs.62.9 lakh in Panvel, near Mumbai.

The homebuyer had paid Rs.6.55 lakh, including taxes and stamp duty. The homebuyer later cancelled the booking after the developer allegedly failed to secure a home loan under an interest subvention scheme, as had been promised earlier.

The developer, on cancellation, forfe...