MahaRERA caps pre-agreement flat-cancellation forfeiture at 2%, ordering a Mumbai builder to refund the rest

In an order in mid-June, MahaRERA held that a developer cannot impose arbitrary or punitive forfeiture when a buyer cancels a booking made before a registered Agreement for Sale. In the absence of such an agreement, only up to 2% of the unit's total cost may be retained as reasonable administrative expense. The authority directed Gokhale Realty to refund the excess it had forfeited, within 30 days.

The regulator did leave developers some room to vary standard allotment terms — provided any such change is disclosed transparently through a deviation report uploaded to the MahaRERA portal. The ruling sits alongside a separate mid-June order reinforcing that registration extensions are administrative and do not move the possession date promised in a registered agreement.

For MMR buyers, who routinely commit sizeable booking amounts in a hot primary market, the 2% ceiling is a meaningful protection — it limits how much can be locked up if plans change before the formal agreement is signed. For developers, it tightens cash-flow assumptions around early bookings and pushes cancellation policies into the open.

The order is fact-specific and can be appealed, so its practical reach will depend on how consistently it is applied. Still, it points to a regulator increasingly willing to police the pre-agreement grey zone where much of Mumbai's booking activity actually happens.