Importance of builder-buyer agreement in cases of RERA Litigation


Affordability, transparency and bringing faith of homebuyers and investors into existence is main agenda behind the introduction of the Real Estate Regulation and Development Act (RERA).

Keeping in mind and safeguarding the rights of homebuyers a proper format of agreement between builder and builder has been drafted in RERA Rules which were further notified by the States.

This builder-buyer agreement is an unduly significant document as it is a legal contract between builder and buyer and is used in court against builder if he doesn’t keep his commitments.

Scenario prior to the RERA Act was bit different. Frauds were carry out without any fear as there was no law for the same. Intentional delay in possession, selling property to multiple buyers, price escalation were some of the common frauds.

To overcome the same builder-buyer agreement has come into the picture. One can look for the following things to be kept in mind while going through the agreement:

  • Construction Timeline: It says that builder will grant possession of the property within 36-42 months from the ‘start of construction. It doesn’t say that possession will be granted within the specified time from the ‘date of booking.
  • Price escalation Clause: This clause is added in the agreement for the benefit of builders wherein the builders penalize the buyer by raising the cost, claiming that raw material and other input costs have increased even though the project is delayed by builder’s fault.
  • Area Change: If builder changes the square foot area, he charges extra for it. The buyer may end up paying 10-15% extra, while the benefit of additional area may be marginal or nil.
  • Payment Delay: With reference to this clause, if the buyer delays in paying installment, he will have to pay interest as well. The developer may include a clause stating that if payment is delayed beyond a point, he bags the right to cancel your allotment and that you may have to damage the heartfelt money, which could be as high as 20-25% of the total cost.
  • Payment on the Basis of Actual Cost: At the time of agreement it is said that payment is to be paid on actual cost basis. Later he may bring some unpleasant charges like membership, electricity connection charges etc. which he may not specify but can be added later on.
  • Transfer Charges: in accordance with this clause, if the apartment is resold prior to the possession, then the builder has to pay these charges.

Importance of Builder Buyer Agreement in RERA Litigation

In the light of above article, we can reach to an outcome that builder-buyer agreement is a legal document which is binding on both the parties and adherence of the same is the responsibility of the parties therein so, it is the responsibility of a vigilant buyer to read and understand the agreement thoroughly.

Builder-buyer agreement being a pivotal document is pertinent to the RERA Legal proceedings as based on this agreement the cases may take a turn in favor or against.

So it is advisable to have a profound study of the agreement before proceeding with the RERA Complaints.

We at Centrik, are one of the top RERA Consultants in RERA Litigation. In case you have any queries regarding the same or want to connect with our experts you can write to us at

Note – Please note that the above article is for education purpose only. This is based on our interpretation of laws which may differ person to person. Readers are expected to verify the facts and laws.


  1. Hi,
    My query is regarding builder buyer agreement. I have booked ready to move house in noida extension & I have made payment in favour of builder rera account of 10% of actual cost but still I have not received the agreement. As per builder this property has endorsement case as flat is already loan from bank & builder has to pay amount to bank to get noc & after that he is able to provide me agreement but he has not told this during he is asking me to get transfer this loan. Please suggest what to do.

  2. I had signed the builder-buyer agreement in 2016 before the RERA was introduced. Today I want the surrender of the apartment as per the builder-buyer agreement terms, while the construction is going on in time and is about 50 %, can i go for the refund. Also, can the RERA court reverse the order pronounced in the open court? What is the remedy for this.

  3. i have book flat on dated 31-03-2019, but builder has not provided builder buyer agreement even after 04 months. now, BBA has been provided on 28-08-2019 but due to this delay i was unable to process my loan sanction processand builder is demanding 50% of payment as per BBA payment plan.what should i do please e-mail.

  4. Hi. I hv booked an apartment in feb 2015 before rera came, in its prelaunch. 95% of the amount is paid and now the builder is asking rs 241 extra per sq ft as an escalation charges. What should I do?

  5. Is there any rule which helps buyers from unwanted Claims of Builder? My builder is asking 8.4 lakhs extra for a flat which is 41 lakhs as per BBA. Almost 20% extra builder is claiming. Project started in 2015 end. Stopped in 2016 end. Now restarting with this new claim. What is the maximum amount builder can claim against escalation? What to do if the buyer (myself) doesn’t agree to this escalation?

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