Builder Buyer Agreement Clauses to Check Before You Sign

Builder buyer agreement clauses decide your price, your possession date and your remedies, so check them against the RERA Act, 2016 before you pay. Under Section 13, a promoter cannot take more than 10 per cent of the cost as advance or application fee unless a written agreement for sale, in the form your state has prescribed, is first signed and registered. Compare every clause with your state’s model form, and treat any term worse than the Act or that form as a point to negotiate or refuse.

Builder buyer agreement clauses to check before you sign

1. Project and parties. State the RERA registration number, promoter, land title and sanctioned plan, and verify the project on your state’s RERA website. See our title verification checklist.
2. Carpet area and price. The agreement should state the carpet area, balcony and terrace separately, and price per unit of carpet area. A “super area” figure alone hides the usable space.
3. Payment plan. Instalments should follow construction stages. Under Section 4(2)(l)(D), 70 per cent of the money collected must go into a separate bank account for construction and land cost, so a plan that is front-loaded should worry you.
4. Possession date. It must be a fixed date, not “approximately”. Look at what extends it: delay caused by the builder should never count.
5. Delay interest. Section 18 liability cannot be replaced by a token fixed amount per square foot.
6. Changes to plans. The promoter must develop the project as per sanctioned plans (s.14(1)); major changes need allottees’ consent as provided in s.14(2).
7. Dispute clause. Be wary of arbitration by the promoter’s nominee only; a RERA complaint stays open.

Example: Neha and Sandeep book a flat in Pune and are asked for 20 per cent as “booking money” before any agreement. Section 13 allows no more than 10 per cent before a registered agreement for sale, so they ask for the agreement first.

RERA agreement for sale: the model form in your state

Builder buyer agreement clauses start with Section 13(2), which says the agreement for sale must be “in such form as may be prescribed”, so the model is set by each state’s RERA rules. It is not the same everywhere:

• Maharashtra: the model agreement is Annexure A to Rule 10 of the Maharashtra RERA Rules, 2017. MahaRERA has listed statutory clauses that a builder may not dilute, such as force majeure limited to natural calamities (s.6), five-year defect liability, refund of excess money within 45 days if the carpet area falls short, and a promoter’s termination only after written notice and a cure period.
• Uttar Pradesh: the Uttar Pradesh Real Estate (Regulation and Development) (Agreement for Sale/Lease) Rules, 2018 (17 October 2018) prescribe a 33-section format. Possession is offered within two months of the completion or occupancy certificate and conveyance follows within three months. If the final carpet area is smaller, the excess is refunded within 45 days with interest.
• Other states: download the prescribed form from your state RERA website and compare it line by line.

Ask the promoter to mark every deviation from the state form. In Maharashtra, deviations must be highlighted when the proforma agreement is uploaded at project registration, and a deviation that contradicts the Act or Rules can lead to rejection of the registration.

Builder buyer agreement clauses on penalty and forfeiture: what the Supreme Court says

Builders’ standard forms often charge buyers heavy interest for late instalments but give them only a token amount for delay. The Supreme Court has repeatedly refused to enforce such terms.

• Pioneer Urban Land v. Govindan Raghavan (2 April 2019): a one-sided agreement cannot bind a buyer, and a buyer cannot be made to wait indefinitely for possession.
• Godrej Projects Development v. Anil Karlekar (3 February 2025): forfeiture of 20 per cent of earnest money was excessive and arbitrary; the builder could keep only 10 per cent of the basic sale price and had to refund the balance with 6 per cent interest.
• Parsvnath Developers v. Mohit Khirbat (20 February 2026): the Court criticised a contract that capped the builder’s delay compensation at ₹10 per square foot per month while charging buyers 24 per cent a year on late payments, and held that an offer of possession without a valid occupancy certificate is no valid offer.

Under Section 2(za) of RERA the buyer’s interest on default and the promoter’s interest on delay are meant to be the same rate. Use this when a draft shows two rates.

Possession, occupancy certificate and defects

Do not accept keys without an occupancy certificate: see occupancy and completion certificate. Once it is issued, Section 19(10) requires you to take possession within two months, so inspect promptly and note defects in writing. For five years from possession, structural and workmanship defects must be fixed free within 30 days (Section 14(3)), failing which you can seek compensation under RERA.

If the builder misses the date, file a RERA complaint or approach the consumer commission: see RERA complaint for delayed possession. For finance papers, see the home loan documents checklist.

Frequently asked questions

What builder buyer agreement clauses should I check?

Check the registered project and parties, carpet area and price, payment plan, a fixed possession date, delay interest, force majeure, changes to plans, defect liability, cancellation and forfeiture, and the dispute clause. Compare them with your state’s prescribed agreement for sale.

Is a written agreement mandatory under RERA?

Yes before the promoter takes more than 10 per cent of the cost. Section 13 requires a written agreement for sale in the prescribed form, and the agreement is to be registered.

Can the builder charge me more interest than he pays me?

Under Section 2(za) of RERA the rate payable by the buyer on default must equal the rate the promoter pays for delay. The Supreme Court criticised unequal rates in Parsvnath Developers v. Mohit Khirbat (2026).

Can a builder forfeit my money if I cancel?

Only a reasonable amount. In Godrej Projects v. Anil Karlekar (2025) the Supreme Court held 20 per cent forfeiture excessive and allowed 10 per cent of the basic sale price.

Quick quiz

Before you accept any builder buyer agreement clauses, see the Home Buyer’s Legal Certificate course. It is a Lexfolio certificate of completion, not a degree or licence to practise law.

Sources

• Real Estate (Regulation and Development) Act, 2016: ss.2(k), 2(za), 4(2)(l)(D), 12, 13, 14, 18, 19
• Maharashtra Real Estate (Regulation and Development) Rules, 2017: Rule 10 and Annexure A
• Uttar Pradesh Real Estate (Regulation and Development) (Agreement for Sale/Lease) Rules, 2018
• Pioneer Urban Land v. Govindan Raghavan (SC, 2 April 2019); Godrej Projects v. Anil Karlekar (SC, 3 February 2025); Parsvnath Developers v. Mohit Khirbat (SC, 20 February 2026)

This page is for education and general information, not legal advice for a specific case. Law as on 29 October 2026.