Builder cancelled booking for late payment? The notices, the refund and your rights

The email arrived overnight, with a PDF attached and a subject line that needed no translation: Termination of Agreement for Sale. In four short paragraphs, citing "repeated defaults in payment of instalments", the builder cancelled booking C-1204, or said it would: the registered agreement "shall stand terminated" fifteen days from the date of the letter unless the overdue amount was paid. Read on a phone in another time zone, it looks final. It is not, yet. A termination is a procedure with steps the law sets down, and each step can be checked.

Rohit's letter#

Rohit (illustrative, as our stories always are) opened that letter abroad. He is buying an under-construction flat in Pune on a home loan, under a tripartite agreement with the builder and his bank, and twice in two years the bank's disbursement had reached the builder weeks after a demand; each time he paid the interest and thought no more of it. The third demand, a slab instalment of Rs 6.8 lakh, fell due while the bank waited for its engineer to verify the stage. The builder's default notice went by registered post to the Pune address he had given at booking, where nobody now collected his post. The termination notice went there too, and by email, which is how he saw it. Names and numbers in this story are illustrative.

What the law actually says#

Section 11(5) of the Real Estate (Regulation and Development) Act, 2016 reads: "The promoter may cancel the allotment only in terms of the agreement for sale." Its proviso says the allottee "may approach the Authority for relief, if he is aggrieved by such cancellation and such cancellation is not in accordance with the terms of the agreement for sale, unilateral and without any sufficient cause." The agreement is the rulebook, and MahaRERA is where a buyer goes when it was not followed. Read the three conditions together: they are joined by "and".

Sections 19(6) and 19(7) bind the buyer. An allottee must pay "in the manner and within the time as specified in the said agreement for sale", and is "liable to pay interest, at such rate as may be prescribed, for any delay in payment". In Maharashtra that rate is the State Bank of India's highest MCLR plus 2 percent, the same rate a promoter pays for its own delay. A bank paying on your behalf does not take the duty over: a disbursement that reaches the builder after the due date is a late payment.

The model agreement for sale turns this into four steps. Read your own agreement's version beside it, as the 10 clauses to check before signing explains.

• Trigger. The promoter may terminate once the allottee has committed three defaults in paying instalments.
• Notice. Fifteen days, in writing, by registered post with acknowledgement due to the address you provided and by email to the email address you provided, stating the intention to terminate and the specific breach or breaches relied on.
• Cure. The promoter is entitled to terminate, at the end of the notice period, only if you have not rectified those breaches within it.
• Refund. After a termination the promoter returns what you paid, subject to setting off any agreed liquidated damages or other amount payable to it.

Before the agreement, the allotment letter governs. Where a promoter cancels an allotment because the balance booking amount was not paid, MahaRERA's model allotment letter, prescribed in 2022, lets it keep no more than 2 percent of the flat's consideration; the allotment letter guide covers the rest of the letter.

A registered agreement is not undone by a letter. It takes a registered deed of cancellation, signed by both sides. In 2025 the Bombay High Court, in Writ Petition (L) No. 18256 of 2025, observed that MahaRERA had erred in directing a sub-registrar to register a cancellation unilaterally instead of appointing a fit person to execute the deed. MahaRERA's Circular 50/2025 of 18 November 2025 made that the procedure: where an order directs a party, promoter or allottee, to execute a deed of cancellation and that party defaults, the Authority appoints a fit and proper person to execute and register it. Whether the termination was valid is decided first, in the complaint; the promoter's side is in Circular 50/2025 for promoters.

A termination is not a cancellation you asked for#

Three exits look alike and run on different law. A termination is the promoter ending the agreement for your default. A cancellation at your request is your own exit, with a deduction and a deed exchanged against the refund: cancelling a booking under Circular 50/2025. A builder-fault exit, where the promoter has missed its own possession date, means a full refund with interest under section 18: RERA rules for delayed possession. Keep them apart in every letter, because each carries its own terms.

Your options, compared#

For a complaint, how to file a MahaRERA complaint covers the forms and hearings, and RERA vs consumer court covers the choice of forum.

An analogy: the disconnection notice#

An unpaid electricity bill does not end with the lights going off next morning. A disconnection notice comes first: it names the bill and gives a date, and paying before that date keeps the supply on. Cut the supply without the notice, or over a bill already paid, and the company has its own rules to answer for. A termination under the model agreement works the same way: the notice names the breach, the fifteen days are your date, and a termination that skipped the steps is the one the proviso to section 11(5) sends to MahaRERA.

What MahaRERA has decided, and how much it decides#

Both sides use this forum. On 18 December 2025 MahaRERA decided six complaints from one project in Palghar district. Five were the developers', asking it to confirm terminations of registered agreements; those buyers had repeatedly failed to pay the balance despite reminders and termination notices, the developers relied on the agreements and on section 11(5), and MahaRERA upheld their right to cancel. The sixth, a buyer's complaint over a booking amount of Rs 1.62 lakh, ended in a refund order. In another reported order, MahaRERA refused to let a builder use a one-sided cancellation clause without fairness and due process, observing that contract terms cannot override the Act's safeguards for buyers. The orders turn on the record: the notices, the defaults, the process.

The forum is also clearing its docket: it disposed of 6,945 complaints in 2025, 81 percent more than the 3,824 of 2024, on MahaRERA's year-end figures reported by Outlook Money.

What to do this week#

1. Date the clock. Note when and how the notice was sent, and count the period your agreement gives.
2. Read your clause beside the model: the number of defaults, the notice channels, the breaches named, the refund terms.
3. Reply in writing inside the period. Set out the dates, attach the evidence (your payments, the bank's acknowledgement of your disbursement request), offer interest at the prescribed rate and ask for a statement of dues.
4. Cure if you can. Pay, or press the bank in writing to disburse, before the period ends.
5. Give a current address and email for notices, in the same letter.
6. Sign nothing final: no deed of cancellation and no full-and-final receipt until you have decided whether to contest.
7. If the termination goes ahead and you dispute it, complain to MahaRERA under the proviso to section 11(5).

Before you reply, look the project up on ReraGenie: its free page lists the complaints and litigation filed against it with case numbers, so you can see whether other buyers have taken this promoter to MahaRERA, and read those orders.

What Rohit did#

He replied the same day by email, and his brother-in-law in Pune sent the signed copy by registered post. The reply gave the demand date and the date his disbursement request reached the bank, two days before the due date, with the bank's acknowledgement and its email scheduling the engineer's visit; it offered interest at the prescribed rate for every day of delay, and gave a new Indian address and his current email for notices. He then asked the bank, in writing, to bring the inspection forward. The bank paid on day eleven, he paid the interest on day twelve, and the builder's next letter confirmed that the dues were clear and the agreement stood. No deed was drawn, and nothing reached MahaRERA.

If the termination stands: four sums, four routes#

If the period runs out and the termination holds, four sums come back from four places.

• The builder's refund: what you paid, less agreed liquidated damages and dues. Get the computation in writing, deduction by deduction, and exchange the deed against the payment rather than signing first.
• The bank's share: cancelling the flat does not cancel the loan. Tripartite agreements generally send the refund to the lender first, up to what it disbursed, as the home loan guide explains. Ask the bank for a closure letter and the documents you deposited.
• The stamp duty: it went to the state, and comes back only on your own application, within a strict deadline that runs from the cancellation deed: claiming a stamp duty refund.
• The GST: from the builder, by credit note under section 34 of the CGST Act while it can still issue one, and otherwise on your own claim to the GST department, whose clock runs from the builder's cancellation letter. Get that letter and every GST invoice before you sign.

From abroad, ask your bank in India which account the refund can be credited to before it is paid, and keep the remittance trail that the NRI buyer's playbook asks you to keep from day one.

What the report adds to your file#

Termination disputes are decided on documents. For a covered Maharashtra project, ReraGenie's Rs 499 buyer report sets out the complaints and cases against it in plain words, with their numbers, which show whether this promoter's dealings with buyers have reached MahaRERA before; the possession story, the first promised date against the current one, which shows whether the promoter is behind its own dates; and the project's filed documents as a ZIP, the start of an exhibit file. Its free 90-day project watch emails you when that project's filing changes while the dispute runs.

The one-line summary#

A promoter can end your booking only in terms of the agreement for sale: three defaults, fifteen days' written notice naming the breach, a window to put it right, a refund less only what the agreement allows, and a registered deed signed by you or, after a MahaRERA order, on your behalf. Reply in writing inside the window.

This article is educational and not legal advice. For a dispute, consult a lawyer who practices before your state's RERA.