Real estate promoter or buyer can now cancel deal in case of default

The government notified the Real Estate (Regulation & Development) Agreement for Sale Rules, 2016, for the union territories on Wednesday, which now gives the right to both, the promoter and buyers, to terminate a deal in case of a default at the behest of either of the parties. 

The "agreement for Sale rules notified by the Ministry of Housing & Urban Poverty Alleviation notified on October 31, 2016, seeks to eliminate the scope of such agreements being in favour of either of the parties. These rules are applicable to the Union Territories of Andaman & Nicobar Islands, Dadra and Nagar Haveli, Daman & Diu, Lakshadweep and Chandigarh. 

The rules specify that "If the buyer defaults by not paying to the promoter for a specified number of demands made by promoter and such a default persists for an agreed upon number of months, promoter can terminate the agreement and cancel the allotment made to buyer. Promoter, can then deduct the booking amount and interest liabilities from the amount to be repaid to buyer," according to a statement from the government. 

Likewise, "If the promoter fails to give ready to move in possession of the apartment or fails to complete the project as per the stipulated time, amounting to default, the buyer can then terminate the agreement and is entitled to refund of amount paid with interest in 45 days of such termination."

However, if the buyer does not want to terminate the deal, the statement said, the promoter will then have to pay him/ her interest till the project is completed.