Agreement for Sale under RERA: Format and Key Clauses Homebuyers Must Know

A careful review of the Agreement for Sale, its prescribed format, mandatory clauses and legal implications is essential for homebuyers.

Introduction

Buying an apartment is one of the most important financial decisions in an individual’s life. At the time of booking, homebuyers often focus on sample apartments, displayed project model, carpet area, price, offers, amenities and possession timeline. However, the Agreement for Sale, the important legal document governing the transaction, is often overlooked.

Agreement for Sale (hereinafter referred to as the “Agreement”) is not a routine formality. It records the binding terms and conditions that govern the rights and obligations of the promoter and the allottee under the Real Estate (Regulation and Development) Act, 2016, and serves as the primary document of reference in case of default or dispute.

This article explains the significance of the Agreement for Sale, its prescribed format, and the key clauses that every homebuyer should examine before execution.

 What is an Agreement for Sale under RERA?

An Agreement for Sale (commonly called Builder-Buyer Agreement or BBA) is a legally enforceable contract between the promoter and the allottee for the purchase of an apartment, plot or building.

It records or incorporates, as applicable, particulars relating to:

• Project details, including the apartment, plot or building, sanctioned plans, approvals and specifications.
• Sale consideration, payment schedule and applicable charges.
• Construction completion, possession schedule and procedure for handing over possession.
• Parking, common areas and the allottee’s proportionate rights therein.
• Representations, warranties and commitments of the promoter regarding the project and compliance with applicable laws.
• Consequences of delay, default, cancellation, interest, compensation and other remedies available to the parties.
• Execution of the Conveyance Deed/Sale Deed, and transfer of title.
• Rights and obligations of both the promoter and the allottee. The agreement becomes legally binding on both parties.

In fact, the Agreement for Sale becomes the principal document governing the relationship between the promoter and the allottee throughout the home-buying process.

To know where the Agreement for Sale fits into the home-buying process, it is essential to look at the sequence of events before possession and conveyance.

H2 Sequential Relationship between Booking, Allotment and Agreement for Sale

A home purchase under RERA generally progresses through three important stages before completion of construction, possession and transfer of ownership rights.

Booking → Allotment → Agreement for Sale

These are the first three stages that establish the relationship between the promoter and the homebuyer and lay the foundation for the subsequent stages of completion, possession and conveyance.

These stages progressively transform a prospective buyer into an allottee and finally into a contracting party under a legally enforceable Agreement.

Booking

This is the initial stage where a buyer relying on the promoter’s advertisements, brochures, project specifications, sample apartment and other representations and selects a property, expresses interest in purchasing it and pays the booking amount.

Allotment

After initial booking and due diligence, if the buyer decides to proceed further, the promoter allots a specific apartment, plot or building and issues an allotment letter. At this stage, the buyer is ordinarily recognised as an “allottee” for the purposes of RERA, subject to the statutory definition under Section 2(d).

Agreement for Sale

After allotment, the Agreement for Sale records the binding terms governing the transaction, including the price, specifications, payment schedule, possession, default, remedies and other contractual obligations of the parties. This is the stage where the understanding between the promoter and allottee transforms into a legally enforceable contract.

The Agreement for Sale bridges the initial stages of booking and allotment with the subsequent stages of construction, completion, possession and execution of the Conveyance Deed or Sale Deed, as applicable.

Legal Requirement under Section 13 of RERA

Section 13 of the RERA Act lays down the legal framework governing the Agreement for Sale. It broadly deals with three aspects:

• When the Agreement for Sale becomes mandatory.
• Its execution and registration, and
• The requirement that it must be in the prescribed format under the applicable State or Union Territory RERA Rules.

Agreement before Accepting More Than 10% of the Cost

Under Section 13(1) of the Act, a promoter cannot accept more than 10% of the cost of the apartment, plot or building as an advance payment without first entering into a written Agreement for Sale with the allottee and registering it under the applicable law.

The provision is intended to ensure that the essential terms of the transaction are formally documented before the promoter accepts a substantial amount of the total cost.

Important Clarification: Section 13 prescribes the latest stage by which the Agreement must be executed. It does not bar the parties from executing it earlier. In practice, early execution provides greater certainty regarding rights and obligations of both parties.

Relevant Statutory Provisions

The relevant sections are reproduced for the benefit of homebuyers and readers:

13 (1) “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 with such person and register the said agreement for sale, under any law for the time being in force.”

13 (2) “The agreement for sale referred to in sub-section (1) shall be in such form as may be prescribed and shall specify the particulars of development of the project including the construction of apartment, plot, or building, along with specifications and internal development works and external development works, the dates and the manner by which payments towards the cost of the apartment, plot or building, as the case may be, are to be made by the allottees and the date on which the possession of the apartment, plot or building is to be handed over, the rates of interest payable by the promoter to the allottee and the allottee to the promoter in case of default, and such other particulars, as may be prescribed.”

Key Takeaway

• Do not pay more than 10% without executing Agreement for Sale.
• Ensure the Agreement is in the prescribed State RERA format.
• Verify that it records the price, payment schedule, specifications, possession date and other essential terms.

Agreement in the Prescribed Format

Section 13(2) of the RERA Act requires the Agreement for Sale to be in the form prescribed under the applicable RERA Rules. The prescribed format is designed to promote transparency, reduce ambiguity and provide a structured framework for recording the rights and obligations of the parties. It also helps homebuyers identify omissions, modifications or additional conditions introduced by the promoter.

State-Specific Prescribed Formats

While Section 13 is common throughout India, the prescribed format of the Agreement for Sale is notified separately under the RERA Rules of each State and Union Territory. Accordingly, homebuyers should always refer to the latest format notified by the concerned RERA Authority.

For example, in Punjab, the prescribed Agreement for Sale was originally notified as Form-A under the Punjab Real Estate (Regulation and Development) Rules, 2017. It was subsequently substituted and renamed Form-Q through the First Amendment Rules, 2020, and further revised by the Second Amendment Rules, 2022. Accordingly, references to Form-Q in this article are specific to Punjab. Homebuyers in other States and Union Territories should refer to the corresponding prescribed Agreement for Sale format notified under the applicable local RERA Rules.

Buyers should insist on the latest prescribed format while executing Agreement for Sale to protect their statutory or contractual rights.

Having examined the statutory requirement and the prescribed format, it is now useful to understand why the Agreement for Sale occupies such an important place in the home-buying process.

Why is an Agreement for Sale Required?

Before enactment of RERA Act, homebuyers often booked properties on the basis of application forms, allotment letters, brochures, advertisements or oral assurances, and one-sided builder-buyer agreements drafted largely in favour of the promoter. These documents often contained incomplete information and left the respective rights and obligations of the parties unclear. This unfair trade practice frequently resulted in disputes related to possession timeline, specifications, payment obligations, common areas, hidden charges, cancellation and payment of compensation.

RERA introduced a mandatory written Agreement for Sale in the prescribed format to bring transparency, accountability, uniformity and legal certainty to real estate transactions. It ensures that the essential terms are clearly documented and legally enforceable.

For this reason, every homebuyer should carefully review the Agreement before signing it. It becomes the principal contractual document governing the transaction and serves as the primary reference in the event of any dispute between the promoter and the allottee.

💡 Homebuyer Tip: Homebuyers should compare the Agreement for Sale presented by the promoter with the prescribed format applicable in their State or Union Territory. They should carefully examine any omission, modification or additional condition, particularly where it affects statutory rights relating to possession, common areas, default, compensation or conveyance. Where the promoter has disclosed any deviations from the sanctioned plans or project particulars in the RERA filings, those disclosures should also be verified. Certain mandatory provisions prescribed under the applicable RERA Act and Rules cannot lawfully be omitted or diluted. Any additional or modified clause should therefore be examined for consistency with the Act, Rules and the prescribed format.

Before finalising and signing the Agreement for Sale, request a soft copy of the draft and take adequate time to carefully review every clause, schedule and annexure.

Having understood why the Agreement for Sale is mandatory and the protection it provides to homebuyers, it is equally important to understand when and how it is executed.

When is the Agreement for Sale Executed?

Execution of Agreement for Sale

The Agreement for Sale is ordinarily executed after the allotment of a specific apartment, plot or building and before the promoter accepts more than 10% of its cost as an advance. The legal requirement governing this stage has already been discussed under Section 13 of the RERA Act.

Stamp Duty and Registration

The Agreement for Sale must be duly stamped and registered in accordance with the Registration Act, 1908 and the applicable State stamp laws. Registration process provides statutory compliance where registration is required and gives the registered document greater evidentiary value and legal certainty regarding the terms agreed between the parties. The applicable stamp duty and registration charges vary from State to State.  

💡 Important Tip: In many States, the stamp duty paid on the Agreement for Sale is adjusted against the stamp duty payable on the final Conveyance Deed/Sale Deed. Homebuyers should, however, verify the position under the applicable State laws.

Documents the Homebuyer Should Receive

After execution and registration, the homebuyer should ensure that:

• The Agreement for Sale is properly stamped, registered and witnessed.
• The complete registered document, including all pages, schedules, annexures and plans referred to in the Agreement, is received.
• All pages and relevant annexures are duly signed by both parties, wherever required.
• The registered copy is legible and complete, with no missing pages or attachments.

💡 Practical Tip: Do not pay more than the amount permitted under Section 13 unless the Agreement for Sale has been properly stamped, executed and registered. Ensure that a complete set of registered documents is received. 

Understanding the Prescribed Format

The following sections walk through the structure of the prescribed Agreement so that buyers know exactly what to check. With the background and disclosures set out in the recitals, the operative terms (1–33) translate those representations into enforceable rights and obligations.

Part I: Parties to the Agreement

Where there are joint allottees, all of them must sign the Agreement. If their shares are unequal, then the respective shares should be clearly stated.

Who are the parties?

Identifying the Promoter and the Allottee:

The promoter can be a Company or Partnership Firm or Individual and similarly allottee can be an Individual or legal person like Company, Partnership Firm and HUF (Hindu Undivided Family).

The first party is always promoter i.e. “Seller” and second party is allottee “Buyer” and collectively termed as the Party or the Parties.

In case of a company (Promoter or Seller) the following information is important. The information to be verified depends upon the legal status of the promoter.

Promoter as a Company

• Corporate Identification Number (CIN) is a unique 21-digit alphanumeric code assigned by the Registrar of Companies (ROC) under the Ministry of Corporate Affairs (MCA) at the time of registration of a Company.
• Director Identification Number (DIN) DIN is a unique identification number allotted to an individual who is appointed or intends to be appointed as a director of a company.
• Registered Office: The official registered office of the company as recorded with the Registrar of Companies.
• Corporate/ Correspondence Address: The address used by the promoter for its corporate or day-to-day correspondence, where different from the registered office.
• Directors in case of Private Limited Company.
• PAN of Company.
• Authorised Signatory details of PAN, Aadhaar supported by Board Resolution and DIN in case the signatory is Director of the company.

💡 Practical Insight: Homebuyer Checklist:

• Verify CIN
• Verify Directors
• Verify Charges
• Verify Registered Office
• Verify Financial Filings

Promoter as a Partnership Firm

In case of partnership firms (Promoter or Seller) the following information is important.

• Partnership Deed with details of all the partners and signing powers of partners
• Registered Address and Address for Correspondence.
• Details of Authorised partner with PAN and Aadhaar Details and resolution.

Promoter as an Individual

In case of Individual (Promoter or Seller) the proof of Address along with PAN and Aadhaar details.

Why Verification of Addresses and Identification Details Matters

Accurate and up-to-date personal details and address details are important for establishing the identity of parties, serving notices and communications, and enforcing contractual or legal rights when required.

Part II: Recitals (“Whereas Paragraphs“) and Promoter Disclosures

Recitals (“Whereas Paragraphs“) set out the background of the transaction and record important facts and declarations of the promoter, such as ownership or development rights, project details, approvals, RERA registration and details of the apartment on the basis of which the parties are entering into the Agreement.

Land Ownership and Development Rights: Paragraph A

This paragraph records whether the promoter is the absolute and lawful owner of the project land or has entered into a collaboration, development or joint development arrangement with the original landowners.

Project Description: Paragraph B

This paragraph identifies the land earmarked for the residential, commercial or mixed-use development and describes the Project, including the number and nature of units, apartments, towers, blocks or phases, and the name assigned to the Project.

Promoter’s Competence and Legal Authority: Paragraph C

This paragraph confirms that the “Promoter is competent to enter into the Agreement and that the legal formalities relating to its right, title and interest in the project land have been completed.”

Commencement Certificate: Paragraph D

This paragraph records the details of the Commencement Certificate.

Sanctioned Plans and Approvals: Paragraph E

This paragraph records that the Promoter has obtained the final layout plan, sanctioned plan, specifications and approvals for the Project and also for the apartment, plot or building. The Promoter undertakes not to make changes except in strict compliance with section 14 of the Act and applicable laws.

RERA Registration: Paragraph F

This paragraph records the declaration that the Project has been registered with the State RERA Authority mentioning date of registration and registration number.

Apartment, Parking and Common-Area Rights: Paragraph G

This is among the most important disclosures for apartment buyers, recording the allotted apartment, carpet area, parking details and the applicable pro rata share in the Common Areas as defined under clause (n) of Section 2 of the Act.

Mutual Declarations, Acceptances and Additional Disclosures: (Paragraphs H–L)

Paragraphs H to L record the mutual declarations, acknowledgements and acceptance of the Agreement by the promoter and the allottee and provision for additional declarations or disclosures, if permissible within the Act.

Part III: Operative Terms of the Agreement (Clauses 1–33)

While the “Whereas Paragraphs” or “Recitals” provide the background, Terms 1 to 33 set out the operative contractual provisions that define the rights, obligations, commitments and liabilities of promoter and allottee in the home-buying process.

Property, Price, Payment and Possession (Clauses 1–7)

Subject to the terms and conditions of this Agreement, the Promoter agrees to sell to the Allottee, and the Allottee hereby agrees to purchase the Apartment or Plot as described in paragraph G.

These clauses establish the commercial and contractual framework of transaction, broadly deal with:

Property identification → Price → Schedule of Payment → Mode of payment → Adjustment and appropriation of payments → Adherence to Construction Timeline → Adherence to Layout Plan and Specifications → Carpet Area → Common Areas → Possession of Apartment → Cancellation by Allottee → Compensation.

💡 Homebuyer Insight: Paragraph G of the Agreement for Sale, read together with Clauses 1.2, 1.8 and 10, is particularly significant for homebuyers. Collectively, these provisions identify the property being purchased, define what is included in the total sale consideration, recognise the allottee’s exclusive ownership of the apartment, confirm the allottee’s inseparable proportionate interest in the common areas, and provide for execution of the Conveyance Deed or Sale Deed.

Possession Alert: Clause 7 is equally important because it governs the possession timeline, the requirement of obtaining the Completion and Occupancy Certificate, the procedure for offering possession to the allottee and the consequences of delay.

Related Reading:

• Undivided Interest in the Common Areas under RERA & Apartment Ownership Laws.
• Completion Certificate and Occupancy Certificate under RERA.

Promoter’s Representations, Default and Conveyance (Clauses 8–10)

These clauses deal with:

• Representations and warranties of the promoter.
• Events of default by the promoter or the allottee, subject to the applicable Force Majeure provisions.
• Consequences and remedies arising from such defaults, and
• Execution of the Conveyance Deed or Sale Deed, as applicable upon receipt of full amount due and fulfilment of the applicable conditions, including obtaining the Occupancy Certificate.

Together, these provisions define the contractual obligations, consequences of default and remedies available to both parties, as well as the mechanism for conveying the property to the Allottee.

Specifications, Maintenance and Rights of the Parties (Clauses 11–23)

These clauses broadly deal with:

• Maintenance of essential services by the promoter till the taking over of the maintenance of the project by the association of the allottees and defect liability of five years.
• Access to and use of common and service areas for repair etc.
• Obligations of the Promoter and Allottee and compliance with applicable laws.
• Restrictions on additional construction and creation of charges.
• Compliance with the applicable Apartment Ownership Act.
• Binding effect, entire agreement and amendment of the Agreement, and
• Applicability of the Agreement to subsequent allottees in case of transfer.

Clauses 17, 18, 19 and 23 are particularly significant because they address restrictions on additional construction, creation of charges, compliance with the applicable Apartment Ownership Act and the continuing effect of contractual obligations of Agreement on subsequent allottees.

Transfer, Association, Dispute Resolution and Misc. Provisions (Clauses 24–33)

The concluding clauses deal with matters such as waiver, severability, further assurances, notices, joint allottees, governing law and dispute resolution.

Clauses 32 and 33 are particularly important. Clause 32 specifies the governing law, while Clause 33 provides the mechanism for resolution of disputes arising from the Agreement.

Together, Clauses 24–33 deal largely with procedural, post-execution and dispute-resolution matters that support the implementation and enforcement of the Agreement.

Want to Understand the Key Clauses Before Signing?

The prescribed format shows the overall structure of an Agreement for Sale, but its real impact depends on the exact wording of individual clauses. Provisions related to price, payment schedule, possession, common areas and facilities, maintenance, default, cancellation, and conveyance can directly affect a homebuyer’s rights and obligations.

Read our forthcoming article:
Agreement for Sale: Important Clauses Every Homebuyer Should Understand and Review.

Conclusion

The Agreement for Sale is a foundational contractual document in a home purchase under RERA. It records the rights, obligations, commitments and remedies of both the promoter and the allottee and serves as the primary reference in the event of any dispute. Before signing, every homebuyer should carefully examine the Agreement, its schedules and annexures to ensure that the terms accurately reflect the transaction and comply with the applicable RERA Rules. A little diligence at this stage can prevent significant legal and financial disputes later.

Frequently Asked Question (FAQ)

Disclaimer

This article is intended solely for general awareness of homebuyers and educational purposes. It is based on the interpretations of provisions of the Real Estate (Regulation and Development) Act, 2016, the prescribed Agreement for Sale and practical observations of the Author. It does not constitute legal advice. Homebuyers should independently verify the applicable laws, project documents and State-specific RERA Rules and obtain professional advice wherever necessary.