After the booking form, the agreement for sale is the most important document you will sign when you buy an under-construction flat. It is registered, it fixes the price, the flat and the possession date, and it is what you will rely on if the project runs late. This guide lists the clauses to read carefully, and what the RERA Act says about them.
Why the agreement matters
Under Section 13 of the RERA Act, a developer cannot take more than 10% of the cost of a flat as an advance or application fee before entering into a written agreement for sale and registering it. The agreement must state the specifications of the flat, the dates and manner of payment, the date of possession and the interest payable on default.
In Maharashtra, MahaRERA has prescribed a model form of agreement for sale. Developers can add clauses, but they should not dilute the buyer’s rights in the model agreement or the Act. Ask for the draft agreement well before the registration date so you have time to read it, ideally with a property lawyer.
The clauses to check
- The flat itself. The unit number, floor, wing, building and the project’s MahaRERA registration number should all be written in. Check them against your booking form and the floor plan attached to the agreement.
- Carpet area. The price must be based on RERA carpet area: the net usable floor area, excluding external walls, service shafts, and exclusive balconies or terraces. Balconies and terraces should be listed separately. See carpet vs built-up vs super built-up area.
- Total price and what it includes. Look for a breakup of the agreement value, and a list of other charges: GST, parking, maintenance deposit, society formation, legal charges and so on. Anything not written in can be added later.
- Payment schedule. Payments should be linked to construction stages, not to dates. Our guide to payment plans for new flats explains the options.
- Possession date. The agreement should state a clear date. Compare it with the completion date on the project’s MahaRERA page. Our guide shows how to find a project on MahaRERA.
- Delay compensation. Under Section 18, if the developer fails to give possession as per the agreement, you can withdraw and get a refund with interest, or stay and get interest for every month of delay. In Maharashtra, the rules set this interest at the State Bank of India’s highest marginal cost of lending rate (MCLR) plus 2%. Read more on your rights when possession is delayed.
- Interest on your late payments. If you pay late, you pay interest too. Under RERA the rate should be the same both ways, so check that the agreement doesn’t charge you a higher rate than the developer pays you.
- Force majeure. RERA lists force majeure as war, flood, drought, fire, cyclone, earthquake or other natural calamities. Be careful of a clause that adds wide extra reasons, like “delay in approvals” or “labour shortage”, to extend the possession date.
- Parking. Under RERA, a garage (a covered space with a roof and walls on three sides) can be sold, but open parking is a common area. The type of parking and the slot number should be written in.
- Specifications and amenities. The brands and quality of flooring, windows, doors, fittings, lifts and the list of amenities should be attached. Under Section 14, the developer cannot change the sanctioned plans and specifications of your flat without your consent.
- Defect liability. Under Section 14(3), if you find a structural defect or a defect in workmanship, quality or services within five years of possession, the developer must fix it free of charge within 30 days. The agreement should not shorten this period.
- Cancellation and refund. Read what happens if you cancel: how much is forfeited and how quickly the rest is refunded. Also check what happens if the developer cancels, which should only be for clear reasons, with notice.
Other points to look for
- Society and conveyance. The agreement should say when the developer will form the housing society and transfer the land and building to it. This follows the occupancy certificate; see our guide to the occupancy certificate (OC).
- Maintenance. Check how much is collected in advance, for how many months, and from when you start paying it.
- Transfer of the project. Under Section 15, the developer cannot hand the project over to another developer without the written consent of two-thirds of the buyers and the approval of the authority.
- Annexures. The title certificate, the approved plans, the floor plan of your flat and the specifications are usually attached. Make sure they are actually there, and match what you were shown. Our list of documents to check before buying a flat covers them.
Registration and stamp duty
The agreement for sale is registered at the sub-registrar’s office, and in Maharashtra stamp duty is paid on it at the time of registration. Get the stamp duty and registration amounts from the developer in advance; our guide to stamp duty and registration charges in Pune shows how they are worked out. Keep the registered agreement, the receipts and the index II safely: you will need them for your home loan, for resale and for any complaint.
FAQs
Can a developer take more than 10% before the agreement?
No. Section 13 of the RERA Act says a developer cannot take more than 10% of the cost as an advance before a registered agreement for sale.
Is the agreement for sale the same as the sale deed?
No. The agreement for sale is a promise to sell, signed while the flat is being built. Ownership passes later, through the conveyance to the society, or a sale deed for the flat.
Can I ask the developer to change a clause?
Yes, you can ask, especially for clauses that go beyond the MahaRERA model agreement. Get any change in writing in the agreement itself, not in a side letter.
Should I get a lawyer to read the agreement?
It is worth it. A property lawyer can check the agreement against the model form and the project’s title documents for a small fee compared with the price of the flat.
This guide is general information, not legal advice. Rules and the MahaRERA model agreement change over time. Have the agreement checked by a property lawyer and verify project details on the official MahaRERA website.
Cover photo: Pashan, Pune Skyline by Avi.ngp, CC BY-SA 4.0, via Wikimedia Commons. Cropped, with text added.