Heavy Fine To Be Paid for Returning Flats by DDA

In order to discourage not so serious buyers, the Delhi Development Authority (DDA) has decided to charge heavy fine amount on the earnest money if the buyer defaults, refuses to payment or returns the flat. This charge would range from 25 % to 100 % of the earnest money as the case may be, no fine will be charged if an applicant succeeds in withdrawing before the day of lots. 

The sole objective behind imposing such heavy charges on the buyers on account of refusal or return is the ideology of dispersing non-serious buyers from the deal. DDA has announced to levy such penalty for the breach of contract for its new housing scheme that will be initiated by mid of June. In the year 2014, due to the absence of strict charges, almost 50% of the buyers returned the flats, and as a consequence of the same, DDA suffered substantial losses. To make sure that the same situation does not arise in the following years the authority has decided to levy considerable plenty on the applicants who fail to withdraw before the day of lots. 

Terms And Conditions Therein


DDA will offer 13,500 apartments for sale in Delhi, for which applicants are supposed to pay RS. 1 lakh and RS. 2 lakh for LIG and MIG/ HIG flats respectively, on account of the earnest money. If an applicant fails to fulfill the promise within 90 days after the day of allotment, 25% of the earnest money will be deducted. Moreover, if an applicant surrenders within the period of three months from the date of issue of the demand letter, 50 % of the earnest money will be forfeited as a charge of the same. On the other side, if an applicant fails or refuses to pay the entire amount of the flat, 100% of the earnest money will be forfeited, and the applicant cannot demand it to be returned. Hence the people who have booked the flat with DDA will have to keep the money ready.

Opposition by Residents Welfare Associations 

This deciding of levying major percentages as a penalty for non-payment of money or withdrawal of an offer by DDA has been subjected to numerous criticisms. In the previous year Pankaj Agarwal, General Secretary of the organization wrote LG Najeeb Jung about the same exclaiming that such provisions for charging huge sums as the penalty are invalid If an applicant's decision is backed by a legitimate reason. 

Moreover, it was argued that DDA doesn’t provide the facility to opt for floor preferences, hence if an applicant due to valid reasons does not buy the flat there should exist no matter of levying heavy penalties. DDA officials explained that they give the prospective applicant a chance to have a glimpse of the location before taking a final decision, provides flats at cheaper rates and the practice has been only adopted to discourage non-serious buyers for applying for the flats.

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