In short
For a project registered under the Real Estate (Regulation and Development) Act, 2016, the builder-buyer agreement is not a free-form contract. Section 13(2) says the agreement for sale “shall be in such form as may be prescribed”, and each state prescribes a model agreement in its rules. Before that agreement is signed and registered, the promoter may not take more than 10% of the cost as advance or application fee (s. 13(1)). The model fixes the clauses that protect the buyer: price, payment plan, possession date, interest on default, carpet area changes, defect liability for five years, cancellation. This guide uses the Uttar Pradesh model of 2018 as a worked example.
The rule
Section 13(2) lists what the prescribed agreement must specify:
- the particulars of development of the project, including construction, specifications, and internal and external development works;
- the dates and manner of payment of the cost;
- the date on which possession is to be handed over;
- the rates of interest payable by the promoter to the allottee, and by the allottee to the promoter, in case of default;
- other particulars prescribed by the state.
The UP-RERA FAQ (Q47) adds that the agreement “is binding on the parties”, with “internal flexibility” for other provisions decided between them. Documents signed before it do not narrow the buyer’s rights: in Uttar Pradesh, any application letter, allotment letter or other document signed earlier “shall not be construed to limit the rights and interests of an allottee” (rule 1(2) of the 2018 Rules).
The difference between this agreement and the sale deed that later transfers ownership is in agreement for sale vs sale deed.
Key clauses in the UP model (2018)
| Clause in the model | What it says |
|---|---|
| 1.2-1.3 Total price | Based on carpet area, “escalation-free”, except increases in development fees or charges levied by the competent authority, which must be shown to you with the notification. New charges imposed after the scheduled completion date cannot be passed on |
| 1.6 Plans | No change to sanctioned plans, specifications or amenities without your previous written consent, apart from minor changes allowed by the Act |
| 1.7 Carpet area | The final carpet area is confirmed after the completion or occupancy certificate. A reduction is refunded within 45 days with interest; an increase can be charged only up to 3% of the carpet area, at the agreed rate per square metre |
| 7.1 Possession date | Timely delivery is “the essence of the Agreement”. The only extension is for force majeure: war, flood, drought, fire, cyclone, earthquake or other natural calamity |
| 7.2 Taking possession | Offered in writing after the completion or occupancy certificate, to be taken within two months |
| 7.3 Late taking | Holding charges of ₹2 per sq ft of carpet area per month for a flat (₹1 for a plot) beyond three months |
| 7.5 Cancellation by buyer | Without the promoter’s fault, the promoter may forfeit the booking amount; it returns 50% of the balance within 45 days and the rest on re-allotment or after one year, whichever is earlier |
| 9.2 Promoter default | You may stop payments until the milestone is met, or terminate and get the entire amount back within 45 days with interest at SBI MCLR on home loans + 1%, “unless provided otherwise under the Rules” |
| 9.3 Buyer default | Missing two consecutive demands makes you liable to interest at the same rate; after three months more, the promoter may cancel, deducting the booking amount and interest |
| Conveyance | Conveyance deed within 3 months of the completion or occupancy certificate, once the price is paid |
| Defect liability | Structural or workmanship defects notified within 5 years of possession must be repaired free within 30 days |
Step by step
- Pay no more than 10% before the agreement. The cap covers sums taken “as an advance payment or an application fee” (s. 13(1); UP-RERA FAQ Q46). If a booking amount pushes the total above 10%, ask for the agreement first.
- Ask for the draft early and compare it with your state’s model, clause by clause.
- Compare with the project page: carpet area, completion date, approvals and specifications. See how to check a RERA project registration and carpet area vs built-up area.
- Read the schedules: payment plan (Schedule C in the UP model) and specifications and amenities (Schedules D and E). Milestone-linked plans tie your payments to construction.
- Check the interest rate. It must be the same both ways (s. 2(za)). Where the state rules prescribe a rate, the law prevails: the Haryana tribunal held that “provisions of law would override any agreement between the parties” (Appeal No. 517 of 2023).
- Register it. Section 13(1) requires the agreement to be registered. In the UP model, if you do not sign and appear for registration within 30 days, and do not cure that within 30 days of a notice, the application is cancelled and the money returned without interest. Stamp duty on the agreement is a state matter: see stamp duty and registration charges.
Your own duties under the Act
- Pay as the agreement says, plus your share of registration charges, municipal taxes, water, electricity and maintenance (s. 19(6)), with interest at the prescribed rate if late (s. 19(7)).
- Take physical possession within two months of the occupancy certificate (s. 19(10)).
- Join the association or society of allottees (s. 19(9)).
- The promoter may cancel the allotment only on the terms of the agreement, and you may go to the Authority if the cancellation is “unilateral and without any sufficient cause” (s. 11(5)).
Which professional to consult
A property lawyer (advocate) enrolled with the State Bar Council can compare the draft with the model and the project page before you pay beyond 10%. This guide is general information, not legal advice. See property lawyers.
Frequently asked questions
Can the builder add clauses to the model?
The UP-RERA FAQ allows “internal flexibility” for provisions decided between the parties, but documents and clauses cannot cut down the rights the Act and the rules give you (UP rule 1(2)).
Is the booking amount refundable if I cancel?
Under the UP model, if you cancel without the promoter’s fault, the booking amount can be forfeited and the balance is returned in two halves. If the promoter defaults, you get the entire amount with interest.
What if the final flat is bigger than agreed?
In the UP model, an increase of up to 3% of the carpet area can be charged at the agreed rate; a reduction is refunded with interest.
Does the 10% cap apply to resale flats?
Section 13 binds a promoter selling in a project. A resale between owners follows the general contract and registration rules: see resale flat and housing society transfer.
Which state’s model applies?
That of the state where the project is, since the agreement is “prescribed” by that state’s rules under section 13(2).
Sources and limits
Only the UP model (English text, 12 October 2018) was read; other states’ models may differ.
General information drawn from the official sources cited and dated on this page. It is not legal, tax or financial advice: for your own situation, ask a licensed professional.
More guides on buyer rights and housing societies
Sources
- The Real Estate (Regulation and Development) Act, 2016 (Gazette text published by UP-RERA) (consulted 18 October 2026)
- The Uttar Pradesh Real Estate (Regulation and Development) (Agreement for Sale/Lease) Rules, 2018, notification No. 1673 of 12 October 2018 (UP-RERA) (consulted 18 October 2026)
- Frequently Asked Questions on RERA (UP-RERA) (consulted 18 October 2026)
- Haryana Real Estate Appellate Tribunal, Appeal No. 517 of 2023, order of 21 April 2025 (Haryana RERA portal) (consulted 18 October 2026)