Allotment letter is a document issued by a real estate developer, government authority, or housing board to a prospective buyer, confirming that a specific plot, flat, or apartment has been provisionally allocated to the buyer subject to payment of the stipulated consideration and compliance with specified terms and conditions. Under Indian law, an allotment letter is recognised under Section 2(d) of RERA 2016, which defines "allottee" as the person to whom a plot, apartment, or building has been allotted, sold, or otherwise transferred.
Legal definition
RERA 2016 does not define "allotment letter" as a standalone term, but defines the "allottee" who receives such a letter:
Section 2(d): "allottee" in relation to a real estate project, means the person to whom a plot, apartment or building, as the case may be, has been allotted, sold (whether as freehold or leasehold) or otherwise transferred by the promoter, and includes the person who subsequently acquires the said allotment through sale, transfer or otherwise.
The allotment letter typically contains:
- Name and address of the allottee
- Description of the allotted unit (flat number, floor, tower, area)
- Total consideration and payment schedule
- Timeline for execution of the builder-buyer agreement
- Stipulated date of possession
- Terms and conditions of allotment
- Consequences of default
For government housing schemes (DDA in Delhi, MHADA in Mumbai, CIDCO in Navi Mumbai, GMADA in Punjab), the allotment letter issued after a draw of lots or application process is the initial document confirming the buyer's right to receive possession and eventually a conveyance deed.
How courts have interpreted this term
NBCC (India) Ltd. v. Shri Ram Trivedi [(2021) SCC OnLine SC]
The Supreme Court held that the developer's obligation to hand over possession is binding from the date stipulated in the allotment letter, and the use of "endeavour" language does not absolve the developer of responsibility for delays. The Court held that delay beyond the stipulated period in the allotment letter constitutes a deficiency in service, entitling the allottee to compensation.
City and Industrial Development Corporation v. Dosu Aardeshir Bhiwandiwala [(2009) 1 SCC 168]
The Supreme Court distinguished between an allotment letter and a conveyance deed, holding that an allotment letter merely creates a right to receive the conveyance in the future but does not itself convey any proprietary interest in the property. Until a sale deed or conveyance deed is executed and registered, the allottee does not acquire title.
GMADA v. Anupam Garg [(2023) SCC OnLine SC]
The Supreme Court held that where an allotment letter specifies that possession shall be given within a defined period (in this case, 36 months), the homebuyer is entitled to exit the project and claim a refund with interest if the authority fails to deliver within the stipulated time. The Court ruled that the allotment letter terms are binding on the allotting authority.
Why this matters
The allotment letter is the first formal document in most real estate transactions with developers and government housing authorities. While it does not transfer ownership, it establishes the buyer's claim to a specific unit and creates a binding obligation on the developer or authority to complete the transaction by executing a sale deed and delivering possession.
Under RERA 2016, the allotment letter has gained additional significance. The date of allotment is relevant for computing the period of delay and interest under Section 18. The Supreme Court has held that the period of allotment is to be considered from the date of the builder-buyer agreement (which typically follows the allotment letter), not from the date of RERA registration.
Practitioners should advise clients to carefully review the terms and conditions in the allotment letter, particularly the payment schedule, possession timeline, cancellation clauses, and penalty provisions. Any ambiguous terms should be clarified before proceeding to the builder-buyer agreement stage. Importantly, allotment letters issued by government housing authorities (DDA, MHADA) carry additional legal weight as they are issued pursuant to statutory schemes, and the allotting authority is bound by its own conditions.
Related terms
Related documents:
Parent concepts:
Frequently asked questions
Does an allotment letter give ownership of the property?
No. An allotment letter only confirms the provisional allocation of a specific unit to the allottee. It does not transfer ownership or create any proprietary interest in the property. Ownership is transferred only upon execution and registration of the sale deed or conveyance deed after the builder obtains the completion certificate and hands over possession.
Can an allotment letter be cancelled?
Yes. An allotment letter can be cancelled if the allottee fails to make payments as per the schedule, violates the terms and conditions, or provides false information. Under RERA, the promoter must give reasonable notice before cancellation and must refund amounts paid (subject to deductions as prescribed by the state RERA rules). Government housing authorities have their own cancellation procedures, typically involving notice and opportunity to be heard.
Is an allotment letter transferable?
Allotment letters are generally transferable, subject to the terms and conditions specified therein and the approval of the developer or allotting authority. Most builders and government authorities charge a transfer fee. Under RERA, the allottee has the right to transfer the allotment, though the promoter may charge prescribed transfer charges.
This entry is part of the Veritect Indian Legal Glossary, a comprehensive reference of Indian legal terminology grounded in statutory text and judicial interpretation.
Last updated: 2026-03-27. Veritect provides this content for informational purposes and does not constitute legal advice.