Seller Returning Token Money? This Is What Buyers Should Do
Seller Returning Token Money- One of the first steps in buying or selling real estate in India is paying token money, or bayana as it is known in Hindi. It can happen to you as a buyer that the seller decides to back out of the agreement and wants the token money back. This blog provides information on the legal options available when the seller returns token money, as well as RERA requirements for Bayana cancellation.
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A tiny portion of the total cost of a real estate deal that buyers deposit with sellers as a sign of their intention to buy is known as token money. It is the beginning of what both the buyer and the seller agree upon as a possible deal. But occasionally, a situation comes up where the seller wishes to return the token money because they are unable to complete the transaction. The ramifications and procedures associated with a seller returning token money to a buyer are covered in this article.
Can the token money be returned or refunded?
A Memorandum of Understanding (MoU) is agreed to by the buyer and seller before any real estate transaction is completed. This MOU is neither a sale nor a legal agreement. But it does indicate the parties’ objectives within the parameters that were set down.
After signing the MOU, if the seller decides to back out of the agreement. They must reimburse any money that the buyer deposited. The seller or selling party may, at their discretion or in accordance with the provisions of the MOU, return the token money and any applicable penalties and terminate the transaction.
Situations change if the buyer backs out since the seller is entitled to keep the token sum that the buyer paid him. The token money will be lost by the buyer, who will not be able to deduct it from their taxes. It is regard as a loss rather than a cost.
RERA guidelines for the return of token money
The Real Estate Regulatory Authority’s (FERRA) regulations safeguard sellers. And purchasers alike by promoting responsibility, openness, and reasonable lending practices in the real estate industry. RERA’s guidelines for token money refunds are:
- To avoid financial exploitation, RERA places a cap on the total amount of token money that developers can obtain from purchasers of real estate.
- After deducting the booking cost, the developer has 45 days to return the token money to the customer if they decide not to proceed with the purchase.
Points to consider when paying the token money.
You have to take the initiative as a buyer throughout the entire real estate transaction. By taking several precautions, you may be able to prevent fraud and future issues. Before paying token money or Bayana, one should consider the following factors:
Take receipt: In order to receive a token money deposit, request a written proof, receipt, or MOU. Make sure all necessary information is include in the agreement. Such as the seller’s data, the payment amount, the termination clause, and the specifics of the property.
Keep witnesses: Try to do these transactions in front of a minimum of one witness. They can validate the validity of the transaction and offer vital support in the event of disputes.
Opt for secure payment mode: Cash payments for token money should be avoid since they carry a number of hazards. For increased security, use online or bank transfer options instead. Due to the lack of confirmation proof, cash payments can cause legal issues.
Conclusion
In summary, purchasing a property requires a number of stages, from registering it to paying token money (Bayana). Any interruption to the process could result in the cancellation of the property transaction. This could apply in the event that the seller decides to cancel the transaction and give the buyer back the token money. It is imperative for buyers to be aware of their legal rights. And the amount of money they should be reimbursed by sellers.
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