Execution of Agreement for Sale/BBA Binding Before Demanding More Than 10% Of Unit Cost by Builder: UPRERA Advisory

Lucknow/Gautambuddh Nagar, January 5, 2023:  U.P. RERA has issued an advisory for the promoters and homebuyers for execution of a registered agreement for sale between them before the promoter can demand more than 10 per cent of the unit cost or before the allottee can pay any amount beyond 10 per cent of the cost of the unit. 

It was emphasized by Sanjay Bhoosreddy Chairman U.P. RERA that the advisory is intended to ensure accountability on part of the promoters and transparency in their business relations. He has invited the attention of both the promoters and the home buyers to the following statutory provisions enshrined under section-13 of the RERA:  

• No promoter can take advance payment of more than 10 per cent of the cost of the apartment, plot or building from any person without first executing a registered agreement for sale with him.

• Such an agreement must be on the model agreement for sale laid down by the State Government under the Rules of 2018.

• The agreement must cover the particulars of development of the project including the construction of building and apartments along with specifications and particulars of internal and external development works.

• The agreement shall provide the dates and the manner of the payments toward the cost unit.

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• The agreement shall specify the date on which the possession shall be handed over to the allottee.

• The agreement shall specify the rate of interest payable by the promoter and the allottee to each other in case of default by either of them and these rates are also prescribed by the State Government which is SBI MCLR+1 percent in this case.

It was also stated by the UP RERA Chief that there have been instances where the promoters have taken most of the payments from the gullible allottees without execution of the registered Agreement for Sale/BBA. He called upon the allottees to remain vigilant so that their lawful interest are not compromised and in case of any grievance in this regard an aggrieved allottee has a right to approach RERA under section-31 of the RERA Act for adjudication of his grievances and enforcement of his lawful claims.