Credit Note is a non-certified letter from the real estate broker who commits to payback certain amount to the property buyer, usually at a deferred date. This may not be on the letterhead of the broker company. Often Credit Note is 2% to 6% cashback of the agreed BSP (Basic Sale Price). Read about credit notes in details here: Credit notes, their credibility and are they worth it?
The bitter truth is, in 80% of the cases, Credit Notes are not honoured. This is just a trap to fool property buyers at the time of booking. Property agents are mostly unorganized and are often very hard to chase after a few weeks of booking. It has been observed that even big and well known firms indulge in such practices and cheat home buyers.
Credit Note Recovery
The bigger question is, how do you get the promised return from the brokers. Ideally, the Credit Note shall be paid back after around 50% payment is made to the developer. In case of down payment, it should be paid as soon as agreements are signed. Although it is not an easy task to get your promised cash back but experts suggest to follow these steps in chronological order.
Step 1: Follow up on Email
The first step should be to create record of your communications with brokers. Write an email to Broker/Firm demanding the dues. Keep higher officials in the communication chain and attach relevant documents such as copy of Credit Note, Name of the agent involved etc.
Meanwhile, write an Email to developer asking if they have released the commission to the broker. It has been observed that brokers often makes excuse like we have not received the commission from the developer yet and thus we shall not be able to honour the Credit Notes.
Step 2: Send a letter through registered post
Next step is to send a post and reiterating the demands made in Email. Attach the copy of Email sent in step 1 with the letter. Ensure to send these letter through registered post or speed post only. Do NOT send them through courier or ordinary post. This letter should ideally be sent after one week of sending the Email.
Our lawyers have drafted a template for your convenience. Please add necessary details as applicable.
Sample template for Notice: Letter demanding payment towards credit note
Step 3: Legal Notice
In case the Broker is not ready to honour the Credit Note, experts suggest to send a legal notice through a lawyer. We have spoken to home buyers from across the Country and most of them told us that their Credit Note was honoured immediately after a Legal Notice was sent.
In case you need help in sending Legal Notice through professionals, our partners at The Logical Buyer can help.
Step 4: Consumer Forum
Service rendered by the Brokers falls under the purview of Consumer Forums. In case the broker is not ready to honour the promises, a suit in relevant consumer forum can be filed. It is advised to identify more buyers from same project who took the services of the same Agent/Brokers as yours. Group of buyers can easily file a collective suit and it shall be cost effective for all individuals involved. If you are looking for capable and reasonable lawyers to do this job, feel free to get in touch with us.
If you have not started with the steps listed above as yet, do it now and take what is rightfully yours!!!.