You booked a flat. Paid the booking amount. Then life happened – a job transfer, a loan rejection, a change of plans. Now you want to cancel, and the builder is telling you that the entire booking amount is non-refundable.
This situation plays out more often than most people realise in Pune and across Maharashtra. And in most of these cases, the builder is wrong.
MahaRERA, Maharashtra’s Real Estate Regulatory Authority, has issued clear orders on exactly how much a developer can legally deduct when a buyer cancels a booking. The rules exist, they are enforceable, and they are firmly on the buyer’s side. Yet many homebuyers either do not know their rights or feel too intimidated to exercise them.
This blog breaks down the MahaRERA refund rules in plain language so you know exactly where you stand before, during, or after a cancellation.
The Core Rule: Builders Can Only Deduct Up to 2%
Let us start with the most important number: 2%.
Under MahaRERA’s model allotment letter framework, the maximum any developer can deduct from your paid amount when you voluntarily cancel a flat booking is 2% of the total flat cost. Not 5%. Not 10%. Not the entire amount. Two percent – and even that only applies if you cancel after 60 days of booking.
The Maharashtra Real Estate Regulatory Authority has ruled that developers cannot levy arbitrary or punitive forfeiture charges for pre-agreement cancellations. In the absence of a registered Agreement for Sale, developers can only deduct a maximum of 2% of the total unit cost as reasonable administrative expenses.
This was reinforced as recently as June 2026 in the case of Sanjay Ramesh Kadu v/s Gokhale Realty LLP, where MahaRERA directed the Pune-based developer to refund the excess forfeited amount within 30 days.
The Deduction Schedule You Need to Know
MahaRERA’s model allotment letter under Order No. 60/2025 lays out a time-based deduction structure for buyer-initiated cancellations. The refund deductions are capped as follows: within 15 days of booking, you are entitled to a full refund with no deduction. Between 16 and 30 days, the builder may deduct up to 1% of the total flat cost. Between 31 and 60 days, up to 1.5% may be deducted. Beyond 60 days, the maximum deduction is 2%.
This is the legal ceiling. Any clause in a booking form or allotment letter that promises higher deductions – 10%, 5%, or “full forfeiture” – is contrary to MahaRERA orders and therefore unenforceable, regardless of what you may have signed.
A real-world precedent makes this clear. In the case of Preeti Dwivedi v/s Raymond Realty, the complainant had paid ₹6.07 lakh as a booking amount for a ₹1.16 crore flat. After cancelling within three months, Raymond Realty insisted on forfeiting 10%, citing its allotment letter. MahaRERA held the clause arbitrary and directed the builder to deduct only 2% and refund the balance to the homebuyer.
The 45-Day Refund Deadline
Knowing your refund is coming is one thing. Knowing when it should arrive is another.
Refunds should ordinarily be processed within 45 days of receiving a written cancellation request, as reflected in MahaRERA’s model allotment letter. If the builder fails to refund within this period, they become liable to pay penal interest.
Failure to refund within 45 days makes the builder liable to pay penal interest at the MCLR + 2% per annum on the refund amount. This interest runs until the full amount is actually returned to you – not until the builder says it will be returned.
Keep the date of your written cancellation request. That is the clock that starts the 45-day countdown.
What If the Builder Has Not Signed an Agreement for Sale Yet?
Many buyers assume that because no Agreement for Sale has been executed, they have no formal rights and the booking amount is essentially a gift to the builder. This is incorrect.
MahaRERA’s position is clear: “There is no express provision in the RERA Act, 2016 by which the promoter is entitled to forfeit earnest amount or part thereof in the event of cancellation of booking by the allottee. Allottees are entitled to refund of the entire amount with interest.” – MahaRERA Appellate Tribunal (binding precedent)
The absence of a signed agreement does not weaken your refund position. If anything, it strengthens it. MahaRERA has consistently been reluctant to uphold large deductions at the pre-agreement stage.
When the Builder Is the One Who Defaults
Everything above covers buyer-initiated cancellations. But what about when the builder fails to deliver?
Under Section 18 of the RERA Act, if the developer fails to complete or hand over possession as per the agreement, the allottee is entitled to a full refund of all payments, along with interest and compensation as determined by MahaRERA. This protection operates independently of buyer-initiated cancellations and is automatically triggered whenever the developer defaults or fails to deliver possession.
In a builder-default scenario, there is no deduction, no 2% cap, and no 45-day timeline working against you. The full amount comes back with interest.
Watch Out for the Credit Note Trap
One tactic some builders use is offering a “credit note” towards another unit or project instead of a cash refund. This may sound reasonable, but accepting it in writing can seriously undermine your legal position.
If a buyer voluntarily signs a letter or email accepting a credit note, the transaction is often treated as settled by consent. At that point, the dispute shifts from refund entitlement to commercial adjustment accepted, making subsequent demands for a cash refund substantially harder to pursue.
Do not sign any document that records acceptance of a credit note unless you genuinely intend to reinvest in another unit. If you want a cash refund, say so in writing – clearly and only that.
What to Do Before You Book – and Before You Cancel
The best protection is knowledge applied before you pay, not after you regret.
Before booking, verify that the project is actively registered on the MahaRERA portal and check the developer’s uploaded deviation reports for any disclosed cancellation policy variations. A recent MahaRERA ruling confirmed that if a builder has uploaded a non-standard cancellation policy on the portal, buyers are deemed to know of it – even if no one specifically pointed it out during the sales process.
Before cancelling, put your request in writing immediately. Do not call – write. Email, registered post, or any format that creates a date-stamped paper trail. State clearly that you are requesting a cash refund under MahaRERA’s model allotment letter provisions. Do not accept verbal assurances of any kind.
If the builder refuses or delays beyond 45 days, you have the right to file a complaint directly with MahaRERA without approaching a civil court first. The process is relatively accessible and the regulatory track record of recent orders clearly favours buyers who have documentation in order.
How Propengine Can Help
Understanding MahaRERA refund rules before you book is one of the most valuable things a good real estate consultant can do for you. At Propengine Realtech, we verify RERA registration status, review allotment letter terms, and flag any deviation reports for every project we recommend – so our clients are never caught off guard by hidden cancellation clauses or arbitrary forfeiture demands.
If you are currently facing a cancellation dispute, or if you want to book a home in Pune with complete regulatory clarity, speak to our team at propenginerealtech.com.
Disclaimer: This blog is for informational purposes only and is based on publicly available MahaRERA orders and circulars. It does not constitute legal advice. For disputes specific to your situation, please consult a qualified legal professional.