Executive Summary
The Agreement for Sale under RERA represents a fundamental shift from developer-drafted contracts to regulated, balanced agreements. Understanding mandatory terms and prohibited clauses is essential for both developers and homebuyers:
- Timing mandate: Before accepting more than 10% consideration
- Format requirement: State-prescribed model agreement
- Mandatory terms: Carpet area, specifications, possession date
- Prohibited clauses: Unilateral modifications, unfair forfeitures
- Registration: Compulsory registration with sub-registrar
- Enforceability: Binding on both parties
This guide examines agreement requirements, mandatory clauses, and prohibited terms.
1. Statutory Framework
Section 13 - Agreement for Sale
RERA mandates:
"A promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale"
Key Provisions
| Section |
Requirement |
| Section 13(1) |
Written agreement before 10% payment |
| Section 13(2) |
Prescribed format and terms |
| Rule 10 |
Model agreement format (state-specific) |
2. Timing Requirements
10% Rule
| Stage |
Requirement |
| Application money |
Maximum 10% before agreement |
| Agreement execution |
Before accepting more than 10% |
| Registration |
Within prescribed timeline |
Consequences of Non-Compliance
| Violation |
Consequence |
| Accepting >10% without agreement |
RERA violation |
| Using non-compliant agreement |
Unenforceable clauses |
| Non-registration |
Registration Act violation |
3. Mandatory Agreement Terms
Section 13(2) Requirements
| Term |
Specification |
| Particulars of parties |
Complete identification |
| Project details |
Registration number, address |
| Carpet area |
RERA-defined carpet area |
| Price and payment |
Total cost and schedule |
| Possession date |
Specific delivery date |
| Specifications |
Construction specifications |
| Common areas |
Facilities and amenities |
Carpet Area Specification
| Element |
Requirement |
| Definition |
As per Section 2(k) |
| Measurement |
Net usable floor area |
| Exclusions |
Walls, shafts, balconies |
| Balcony area |
Separately mentioned |
Specifications Disclosure
| Category |
Details Required |
| Structural |
RCC frame, brick/block |
| Flooring |
Type, quality, brand |
| Fittings |
Bathroom, kitchen fixtures |
| Electrical |
Wiring, fittings, points |
| Painting |
Internal, external finish |
| Doors/windows |
Material, specifications |
4. Price and Payment Terms
Price Structure
| Component |
Disclosure |
| Basic price |
Per sq.ft. or total |
| Preferential charges |
Floor rise, view premium |
| Development charges |
As applicable |
| Parking charges |
If separate |
| Taxes |
GST and other taxes |
| Total consideration |
All-inclusive price |
Payment Schedule
| Milestone |
Trigger |
| Booking |
10% on agreement |
| Foundation |
As specified |
| Construction stages |
Defined milestones |
| Possession |
Final payment |
5. Possession Terms
Mandatory Provisions
| Term |
Requirement |
| Possession date |
Specific date or month |
| Extension rights |
Force majeure only |
| Compensation |
Interest for delay |
| Withdrawal right |
Buyer's option on default |
Force Majeure
| Covered |
Not Covered |
| Natural disasters |
Financial difficulties |
| Government orders |
Labor disputes |
| Pandemic |
Material shortage |
| War/civil commotion |
Funding delays |
6. Prohibited Clauses
Unfair Clauses Under RERA
| Clause Type |
Status |
| Unilateral modification |
Void |
| One-sided forfeiture |
Unenforceable |
| Delayed interest differential |
Prohibited |
| Arbitrary cancellation |
Invalid |
| Waiver of RERA rights |
Void |
Specific Prohibited Terms
| Prohibited Term |
Reason |
| "Super area" pricing |
Only carpet area permitted |
| Unlimited extension |
Maximum 1 year for force majeure |
| Forfeiture beyond reasonable |
Consumer protection |
| Binding arbitration only |
Cannot exclude RERA jurisdiction |
| One-sided interest rate |
Same rate for both parties required |
Interest Parity
| Provision |
RERA Requirement |
| Delay interest |
Same rate for buyer and developer |
| Rate specification |
SBI MCLR+ or as specified |
| Compounding |
As per state rules |
7. Registration Requirements
Agreement Registration
| Requirement |
Details |
| Timing |
Within 30 days of execution |
| Authority |
Sub-Registrar |
| Stamp duty |
As per state rates |
| Registration fee |
State-prescribed |
Documents for Registration
| Document |
Purpose |
| Agreement |
Original signed copies |
| ID proof |
Both parties |
| PAN cards |
Tax compliance |
| Photographs |
Both parties |
| NOC |
If applicable |
8. Allottee Rights in Agreement
Guaranteed Rights
| Right |
Protection |
| Information access |
Project documents, plans |
| Association membership |
Become member of association |
| Timely possession |
On committed date |
| Compensation |
For delay or deficiency |
| Withdrawal |
On developer default |
Default Remedies
| Default By |
Allottee Rights |
| Developer delay |
Compensation + interest |
| Developer default |
Full refund + interest |
| Quality deficiency |
Rectification or compensation |
| Specification deviation |
Compensation |
9. Developer Rights in Agreement
Legitimate Provisions
| Right |
Scope |
| Payment collection |
As per schedule |
| Access for construction |
Reasonable construction access |
| Modification for compliance |
Statutory requirements |
| Cancellation for default |
On allottee payment default |
Cancellation Process
| Step |
Requirement |
| Notice |
Written notice to allottee |
| Cure period |
Reasonable time to cure default |
| Forfeiture limits |
As per state RERA rules |
| Refund balance |
Return excess payments |
10. State-Specific Variations
Model Agreement Differences
| State |
Key Variations |
| Maharashtra |
Detailed fixture specifications |
| Karnataka |
Construction milestone schedule |
| UP |
Specific cancellation terms |
| Gujarat |
Interest rate specifications |
Stamp Duty Considerations
| State |
Stamp Duty Rate |
| Maharashtra |
5-6% |
| Karnataka |
5% |
| Delhi |
4-6% |
| Gujarat |
4.9% |
11. Compliance Checklist
For Developers
For Homebuyers
12. Key Takeaways for Practitioners
10% Rule is Mandatory: Agreement must precede payments exceeding 10%.
Model Agreement Preferred: Use state-prescribed formats to ensure compliance.
Carpet Area Only: Price must be on carpet area, not super built-up.
Interest Parity Required: Same rate for delay compensation to both parties.
Prohibited Clauses Void: Unfair terms are unenforceable regardless of signing.
Registration Mandatory: Unregistered agreements lack legal effect.
RERA Rights Inalienable: Agreement cannot waive statutory RERA protections.
Conclusion
The Agreement for Sale under RERA has transformed from a developer-drafted instrument to a balanced, regulated document protecting both parties. Mandatory terms ensure transparency in specifications, pricing, and timelines, while prohibited clause provisions prevent one-sided contracts. Both developers and buyers must understand these requirements to ensure valid, enforceable agreements that comply with RERA's protective framework.
