What Happens If Bank Rejects Your Home Loan After You Have Paid Booking Amount? This MahaRERA Ruling Sets Precedent

Lodha Refund Case: Booked a flat and got your loan rejected? You're still entitled to a refund. MahaRERA has ordered Lodha Developers to return Rs 6.65 lakh with interest to a homebuyer after the builder tried to keep the money despite earlier verbal promises of a full refund. Here's why this ruling matters for homebuyers across India.

What is the case

A homebuyer working in Russia booked a Rs 2.26 crore apartment in Lodha Mulund in 2021. The sales agent told him upfront if the loan doesn't get approved, the full Rs 7 lakh booking amount would be returned, no questions asked, as per a report by Economic Times.

When the buyer's loan application was later denied by the bank, he reached out to Lodha Developers for the refund. Instead of honoring their word, the builder pointed to the small print in the booking form specifically Clauses 1.4 and 3.5 which they claimed made the amount non-refundable, the report added.

Refusing to accept this, the buyer took the matter to the Maharashtra Real Estate Regulatory Authority (MahaRERA), filing a complaint under Section 12 of the RERA Act, as per the report.

MahaRERA Ruling

MahaRERA wasn't convinced by Lodha's arguments. The regulator observed that:

The buyer cancelled the booking just 9 days after signing.

The form had several missing signatures and blank sections.

There was no evidence that terms were explained before signing.

The forfeiture clause was one-sided and unfair, especially since the booking was based on verbal assurances, not a formal sale agreement.

In its June 10, 2025 ruling, MahaRERA stated that such a clause goes against the spirit of consumer protection embedded in the RERA Act.

What the Order Says

The authority ruled, "The Complainant is entitled to a refund of Rs 6,65,000. The promoter is directed to pay this amount on or before July 15, 2025, failing which interest at 2 per cent above SBI's Marginal Cost of Lending Rate shall apply from July 16, 2025, until full repayment," as quoted by ET.

The builder's claim of financial loss was rejected outright. According to MahaRERA, the developer had not lost any real opportunity to sell the unit in just nine days, the report added.

Why This Ruling Matters

This judgement sends a message: Builders can't write whatever they want into booking forms and expect it to hold up. If the agreement is tilted heavily in favour of one side, especially without proper disclosure or clarity, it won't be enforced.