SC Limits Builder Deductions to 10% on Homebuyer Cancellations

Dated on: Friday 7th February 2025

The Supreme Court of India has ruled that real estate developers cannot deduct more than 10% of the basic sale price (BSP) if a homebuyer cancels their booking. This decision addresses the issue of one-sided agreements favoring developers and aims to protect homebuyers from unreasonable forfeiture practices. The court emphasized that contractual terms that are excessively one-sided, unfair, and unreasonable amount to unfair trade practices. This ruling reinforces the principle that deductions beyond 10% are excessive and legally unjustifiable.