Cancellations and refunds: handling a booking that falls through, with a clean paper trail

Every builder has a few bookings that fall through. A loan gets rejected, a family moves cities, someone finds a flat they prefer. The cancellation itself is rarely the problem. The problem is what happens next: a deduction nobody can explain, a refund that takes months, a unit that still shows as booked on one sheet and available on another, and a buyer who files a complaint because nobody wrote anything down.

Handled well, a cancellation is a short, clear process that leaves no bad feeling and puts the flat straight back on sale.

What can a builder deduct when a booking is cancelled?

MahaRERA issued a model allotment letter and model agreement for sale in 2022 (Order No. 31/2022, which replaced Order No. 30/2022). Where the allotment letter applies, the deduction a promoter can make when the buyer cancels is capped at a maximum of 2%. The promoter may change the letter only in the buyer's favour, by giving more days to cancel or a lower deduction.

MahaRERA has applied this in complaints. In a June 2026 order, it held that without a registered agreement for sale, a developer could keep at most 2% of the total unit cost as administrative expenses, and directed the developer to refund the excess it had forfeited within 30 days, with interest if it paid late.

The safe practice is simple: put your cancellation terms in the allotment letter in plain words, keep them within the model terms, and apply them the same way to every buyer. If your booking form says something stricter, speak to your lawyer before you rely on it.

How quickly should the refund be paid?

State a refund period in your booking terms and keep to it. Late refunds are where most complaints start. A buyer who receives the right amount on the promised date rarely escalates. A buyer who is paid in five instalments over three months usually does, and MahaRERA can add interest to whatever is still owed.

Agree the refund amount in writing with the buyer before you pay it, showing what they paid, what is deducted and why, and what they will receive.

What should you record when a booking is cancelled?

Write down the facts on the day it happens, not at month end:

• The date the buyer asked to cancel, and how (email, letter, in person).
• Every amount the buyer has paid, instalment by instalment, with the mode of payment.
• The deduction, the rule it comes from, and the refund amount.
• Whether a channel partner brought the buyer, and whether any commission was approved or paid on the booking.
• The refund date and the reference number of the transfer.

If a channel partner's commission was already approved for this booking, decide what happens to it under your agreement with the partner, and record that too. Settling this early avoids a second argument later.

Why does the unit status matter so much?

A cancelled booking has to show up everywhere at once. If the sales team still sees the flat as booked, it sits unsold for weeks. If one salesperson sees it as available while accounts still show the old buyer, two people can end up promising the same flat. Our post on live inventory across towers explains why one status per unit, updated in one place, prevents that.

The status also matters for compliance. The booking status of units is part of your MahaRERA quarterly progress report, so a cancellation in the quarter needs to be reflected correctly when you file.

How do you handle a cancellation step by step?

1. 1Get the request in writing. Ask the buyer to confirm the cancellation by email or letter, and note the date.
2. 2Pull the payment history. List every amount paid against the booking, from the token amount onward.
3. 3Work out the deduction and refund. Apply the terms in the allotment letter, within MahaRERA's model terms, and share the calculation with the buyer.
4. 4Settle the channel partner side. If a partner brought the buyer, record what happens to any commission.
5. 5Pay the refund on time. Pay within the period your terms promise and record the date and transfer reference.
6. 6Put the unit back on sale the same day. Update the unit's status so the whole team sees it as available.

Where does TRET fit?

TRET is a real estate CRM built for Indian builders and channel partners. Each booking holds the buyer, the unit, the agreement value, the channel partner, the payment schedule and every payment recorded against its instalment, as described in our post on payment schedules and demand notes. Every change is audit-logged, and your data is exportable at any time.

That means when a booking falls through, the payment history, the partner and the dates you need are already in one place, and the unit's status is the same for everyone in your team. TRET does not decide deductions or pay refunds; your accounts team and your lawyer or CA do that. What changes is that nobody has to rebuild the history from three spreadsheets first.

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