Hyderabad: The Telangana Real Estate Regulatory Authority (RERA) has set aside a decision taken by Pagadala Constructions Pvt. Ltd to cancel the allotment of a flat to a buyer. The authority found that the builder had violated legal procedures by cancelling the flat allotment without giving notice, as mandated.
The issue arose after a buyer booked a 3BHK flat in the project Anya at Bowrampet, Hyderabad, and paid over Rs 24 lakh, roughly 31 per cent of the flat cost, in multiple installments. The builder cancelled the allotment claiming that the buyer had defaulted on payments and allocated the flat to another customer.
The complainant argued that the flat was mortgaged and no bank was willing to process a loan without the occupancy certificate (OC). She claimed the builder was aware of this issue and had still demanded more money. She alleged that the flat was resold at a higher price.
The builder maintained that the buyer was informed about the mortgaged status at the time of booking and had agreed to continue with payments. The builder claimed that the cancellation was valid as the buyer failed to follow the agreed payment schedule.
After reviewing the documents, RERA found that the complainant had signed a price confirmation letter that disclosed the mortgage status which weakened her claim that she was unaware. However, RERA ruled that the builder had violated Clause 9.3(ii) of the Telangana RERA Rules by cancelling the allotment without issuing a 30-day notice to the buyer.
While rejecting the complainant’s claim of being misled, RERA noted that the builder had breached the law by collecting more than 10 per cent of the flat cost without executing a registered agreement for sale, which is mandatory under Section 13(1) of the RERA Act.
In its final order, RERA gave the buyer 45 days to pay the pending amount along with an interest of 11 per cent per annum. If she pays the amount, the builder must reallocate the flat and execute a registered agreement for sale. If she fails to pay, the builder can cancel the allotment but must refund the amount paid after deducting only the booking fee within 30 days.
Additionally, the RERA secretary has been directed to initiate separate proceedings against the builder for the violation of Section 13(1).