India, Feb. 6 -- In a major relief to homebuyers, the Supreme Court has said that real estate developers cannot deduct more than 10 per cent of the basic sale price of an apartment if a buyer decides to cancel the booking, relying on terms of a one-sided agreement.

By capping cancellation charges at 10% of the Basic Sale Price (BSP), the Court has provided much-needed relief to homebuyers, preventing developers from imposing arbitrary and excessive deductions. Legal experts told HT.com that the ruling strengthens the legal stance of homebuyers and sets a precedent that the courts will strike down any unfair contractual term.

A bench of Justices B R Gavai and S V N Bhatti had ruled earlier this week that contractual terms that are ex fac...