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Builder Buyer Agreement Clauses NCR Buyers Must Check

By ADiHomes Updated 13 min read

Builder Buyer Agreement Clauses NCR Buyers Must Check
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The builder-buyer agreement decides what you get, when, and what happens if either side slips. Before the Real Estate (Regulation and Development) Act, 2016 (RERA), NCR agreements were drafted by developers and often weighed against buyers. RERA changed the ground rules, but reading the agreement is still essential.

This guide covers the builder buyer agreement clauses behind most NCR disputes, comparing the Uttar Pradesh model agreement with how Haryana’s regulator and tribunal have ruled.

Why the RERA model agreement matters

Section 13 of RERA says a promoter cannot take more than 10% of the cost of a flat or plot as an advance or application fee without first signing and registering a written agreement for sale. The same section says the agreement must be in the form prescribed by the state, and must state the payment schedule, the possession date and the interest rates payable by each side on default.

Uttar Pradesh prescribed its form through the UP Real Estate (Regulation and Development) (Agreement for Sale/Lease) Rules, 2018, notified on 12 October 2018. Haryana prescribes its form as Annexure A under rule 8 of the Haryana Real Estate (Regulation and Development) Rules, 2017. Delhi projects fall under the Delhi RERA framework, which this article does not cover in detail.

The UP rules also say that an application form or allotment letter signed earlier cannot limit your rights under the registered agreement, the Act or the rules. UP RERA’s FAQ notes the prescribed agreement binds both parties but allows some internal flexibility, which is where one-sided drafting creeps back in. Promoters must upload the proforma allotment letter, agreement and conveyance deed when registering a project, so you can compare the developer’s draft with the model before paying anything beyond the booking amount.

Quick reference: the clauses that matter most

Clause UP model agreement (2018 rules) Haryana position (rules and orders) What to check in your draft
Possession date A fixed date must be written in; extension only for force majeure such as war, flood, earthquake or other natural calamity Possession date from the agreement; regulator works out a “deemed date of possession” An actual calendar date, not “subject to approvals” or open-ended grace periods
Delay interest Rate prescribed in the rules; SBI MCLR + 1% per UP RERA Rule 15: SBI highest MCLR + 2% Same rate for buyer and builder defaults; no token “₹ per sq ft” compensation instead
Cancellation by buyer Booking amount forfeited; 50% of balance in 45 days, rest on re-allotment or within one year Forfeiture capped at 10% under the 2018 Gurugram forfeiture regulations No forfeiture of “earnest money” above these limits, and no forfeiture of taxes or brokerage paid
Carpet-area change Refund within 45 days with interest if area falls; buyer pays for increase only up to 3% Carpet area is the statutory basis under the Act Price quoted per sq ft of carpet area, not super area
Parking Garage or covered parking sold with the flat as one unit; open slot allotted free, to be ratified by the residents’ association Same Act definitions apply Parking type, number and location stated; no separate charge for open parking
Escalation Price escalation-free except authority-levied charges, with the notification attached EDC and IDC disputes common; interest on delay is payable on the full amount paid No vague “cost escalation” clause; demands backed by government orders
Maintenance First year’s maintenance included in the price; capped rise if no association is formed Orders have tied maintenance to the date possession is offered Amount and duration of advance maintenance and any sinking fund

1. Possession date and force majeure

The Act requires the agreement to state the possession date. The UP model treats timely delivery as “the essence of the agreement” and allows extra time only for force majeure, limited to war, flood, drought, fire, cyclone, earthquake or other natural calamity.

Watch for drafts that count the possession period from a future event, such as “start of construction of the tower”, or add automatic grace periods. If force majeure makes the project impossible, the model requires a full refund within 120 days.

Also check the definition of “ready to move in”. The UP model says it means a habitable flat, complete with the agreed specifications and amenities, for which an occupation or completion certificate has been issued. A possession offer without these does not meet that definition.

2. Delay interest: the rate and the base

If the developer misses the agreed date, Section 18 of RERA lets you either withdraw with a refund plus interest and compensation, or stay on and receive interest for every month of delay.

The prescribed rate differs by state:

  • Uttar Pradesh: SBI MCLR + 1%, as stated by UP RERA and written into the model agreement.
  • Haryana: SBI’s highest MCLR + 2% under rule 15, applied as on the date of the order. In one appeal decided on 5 June 2025, the tribunal accepted a rate of 10.35% (8.35% + 2%).

Because the rate is linked to SBI’s MCLR, it moves over time, so check SBI’s current figure. The model also makes the rate symmetrical: the buyer pays the same benchmark-linked interest on missed instalments that the developer pays on delay. Agreements that charge buyers 18% or 24% for late payment while offering a fixed ₹5 or ₹10 per sq ft per month for delayed possession do not follow the model.

Worked example

Suppose you have paid ₹60 lakh towards an ₹80 lakh flat and possession is 12 months late. Assume SBI MCLR is 8.5%. This is an illustrative figure only.

  • UP rate of 9.5%: ₹60 lakh × 9.5% = ₹5.7 lakh for the year, about ₹47,500 a month.
  • Haryana rate of 10.5%: ₹60 lakh × 10.5% = ₹6.3 lakh for the year, about ₹52,500 a month.
  • A flat ₹5 per sq ft per month on a 1,200 sq ft unit: ₹6,000 a month, or ₹72,000 for the year.

The base matters too. In Appeal No. 619 of 2021 (10 January 2023), the Haryana tribunal held delay interest is payable on the total paid, refusing to exclude ₹3.84 lakh of development charges from ₹32.05 lakh. Check that “amount paid” is not defined narrowly.

In July 2026 the tribunal also refused 18% interest sought on the strength of a consumer-law ruling, holding that RERA claims carry the rule 15 rate. HRERA orders citing the Supreme Court’s Newtech Promoters v State of UP judgment (2021) note that the authority decides refund and interest, while compensation goes to the adjudicating officer.

3. Cancellation, forfeiture and refunds

This is where pre-RERA agreements did the most damage. Some allowed developers to forfeit large sums, in some cases the entire earnest money, if a buyer withdrew or missed payments.

In UP, the model says that if you withdraw without any fault of the promoter, the promoter may forfeit the booking amount. It must return 50% of the balance within 45 days of cancellation. The remaining 50% comes on re-allotment of the unit or at the end of one year, whichever is earlier, and the re-allotment date must be shown on the UP RERA website.

If the promoter cancels because you missed two consecutive demands and the default continues for three months after notice, it may deduct the booking amount and interest due. It must give you 30 days’ notice before termination.

In Haryana, the HARERA Gurugram forfeiture regulations of 2018 say forfeiture of earnest money cannot exceed 10% of the consideration where the builder cancels or the buyer withdraws. Any contrary clause is void. In Appeal No. 722 of 2022, decided on 21 July 2025, the tribunal upheld a cancellation but held the builder could not forfeit the entire earnest money.

In Appeal No. 168 of 2023 (29 May 2026) it upheld a 10% deduction where defaulting buyers surrendered before the possession date. Orders variously apply the 10% to the “sale consideration” or the “basic sale price”.

Worked example

You booked an ₹80 lakh flat, paid ₹30 lakh, and the booking amount was ₹8 lakh. You withdraw for personal reasons while the project is on schedule.

  • UP model: ₹8 lakh is forfeited. Of the ₹22 lakh balance, ₹11 lakh is due within 45 days and ₹11 lakh on re-allotment or within a year.
  • Haryana: a 10% deduction on ₹80 lakh is ₹8 lakh, leaving ₹22 lakh refundable. HRERA orders have often added interest on the refund from the date of cancellation.

If the withdrawal is because of the developer’s delay, Section 18 applies instead: full refund with interest, not forfeiture.

4. Carpet area and area-change clauses

RERA defines carpet area as the net usable floor area. It excludes external walls, service shafts, exclusive balconies and exclusive open terraces, but includes internal partition walls. On 3 January 2024, UP RERA told developers to sell only on carpet area. It said “super area” has no basis in the Act and that sales on that basis were illegal.

The UP model requires the developer to confirm the final carpet area after the occupation or completion certificate. If the area shrinks, the excess must be refunded within 45 days with interest at the prescribed rate. If it grows, the developer may demand payment only for an increase of up to 3%, at the agreed rate per sq ft. The model does not provide for charging beyond 3%, so ask how any larger change would be handled.

Worked example

Agreed carpet area is 900 sq ft at ₹9,000 per sq ft (₹81 lakh).

  • Final area 920 sq ft, a 2.2% rise: you can be asked for 20 × ₹9,000 = ₹1.8 lakh at the next milestone.
  • Final area 870 sq ft: the developer owes you 30 × ₹9,000 = ₹2.7 lakh within 45 days, with interest.

Section 14 also bars changes to sanctioned plans and specifications without your consent, apart from certified minor structural or architectural alterations. Other changes to the building or common areas need written consent from two-thirds of allottees, so be wary of any “deemed consent” clause.

5. Parking

The Act defines a garage as a roofed space walled on three sides, and excludes open parking from it. Open parking areas are listed as common areas. UP RERA’s FAQ states plainly that open parking areas therefore cannot be sold to allottees.

The UP model treats the flat and any garage or covered parking as a single, indivisible unit. It records an open parking slot allotted free of cost, to be ratified by the residents’ welfare association. Check that the type, number and location of any paid covered parking are named, and that no “open parking” charge appears in the cost sheet.

6. Price escalation and development charges

The UP model says the total price is escalation-free. The only exception is increases in development fees or other charges levied by a competent authority. Any such demand must enclose the relevant notification, and it applies only to later payments.

Fees imposed after the registered completion date, including extensions, cannot be passed on. Challenge clauses allowing “escalation in cost of construction material”.

In Gurugram, ask for a breakdown of external and internal development charges (EDC and IDC) collected and deposited.

7. Maintenance, holding charges and defects

Under the UP model, the promoter maintains essential services until the residents’ association takes over, and one year’s maintenance from the completion certificate is included in the total price. If no association is formed within a year, the promoter may collect the disclosed maintenance amount plus 10% for the following year.

If you do not take possession within two months of a valid offer, holding charges of ₹2 per sq ft of carpet area per month can apply, but only for the period beyond three months. For a 900 sq ft flat that is ₹1,800 a month. In Haryana, a HARERA Gurugram order quoted in Appeal No. 884 of 2024 directed that maintenance be charged only from the date possession was offered. The same order also set the buyer’s default interest at the same rate as the promoter’s delay interest.

Section 14(3) of RERA makes the developer fix structural defects, poor workmanship and service defects reported within five years of possession, free of charge and within 30 days. Any clause shortening this period or making repairs chargeable conflicts with the Act.

A pre-signing checklist

  1. Download the developer’s proforma agreement from the RERA project page and compare it with the state model, clause by clause.
  2. Confirm the possession date is a calendar date and that force majeure is limited to genuine calamities.
  3. Check that the delay-interest rate matches the state rule and is the same for both parties.
  4. Read the forfeiture clause against the 10% limits described above.
  5. Insist on a carpet-area price, with a separate list of balcony and terrace areas.
  6. Pay no more than 10% before the agreement is registered.

When comparing new projects in Noida or new projects in Gurugram, request the draft agreement early. Our project listings show RERA numbers you can use to look up each project’s registered documents.

Rules and model formats get amended and orders turn on facts, so a short review by a property lawyer before registration is worthwhile.

Frequently asked questions

Can a builder take more than 10% before signing the agreement?

No. Section 13 of RERA bars a promoter from accepting more than 10% of the cost as an advance or application fee without first executing and registering a written agreement for sale.

What interest does a builder pay for delayed possession in UP and Haryana?

UP RERA applies SBI MCLR plus 1%, while Haryana's rule 15 uses SBI's highest MCLR plus 2%, taken as on the date of the order. Both rates change as SBI's MCLR changes.

How much can a builder forfeit if I cancel my booking?

In UP, the model agreement allows forfeiture of the booking amount when the buyer withdraws without any fault of the promoter. In Haryana, the 2018 HARERA Gurugram regulations cap forfeiture at 10% of the consideration and make any contrary clause void.

Can a builder charge extra if the carpet area increases?

Under the UP model agreement, the builder may charge for an increase of up to 3% of carpet area, at the agreed rate. If the area falls, the excess must be refunded within 45 days with interest.

Can open parking be sold to buyers?

RERA lists open parking areas as common areas, and UP RERA's FAQ says they therefore cannot be sold to allottees. Covered parking or a garage can be sold with the flat.

Does an allotment letter override the registered agreement?

In UP, the 2018 agreement rules say documents signed before the registered agreement cannot limit the buyer's rights under the agreement, the Act or the rules.

How long is the builder liable for structural defects?

Section 14(3) of RERA makes the promoter rectify structural and workmanship defects reported within five years of possession, free of charge and within 30 days.

Sources

Updated 20 October 2026. This article is general information, not legal or financial advice; check current rules and project details before you decide.

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