Key Clauses to Look for in a RERA Compliant Sale Agreement

Introduction

Buying a home is one of the biggest financial commitments you will make in your lifetime. With the implementation of the Real Estate (Regulation and Development) Act, 2016 (RERA), the government has introduced transparency and accountability in the real estate sector. One of the most important documents in this process is the Sale Agreement—a legally binding contract between the buyer and the developer.

Under RERA, this agreement must adhere to specific guidelines to protect the interest of homebuyers. However, not all agreements are drafted correctly, and missing clauses can lead to disputes later. In this blog, we’ll cover the 10 most important clauses to look for in a RERA-compliant Sale Agreement and why they matter.

What is a RERA-Compliant Sale Agreement?

A RERA-compliant sale agreement is a legally binding document that outlines the terms and conditions of the property sale as per the guidelines laid down under the RERA Act, 2016. It ensures:

• Transparency in the transaction

• Clarity regarding timelines, costs, and obligations

• Legal protection for both buyers and developers

RERA mandates that every sale agreement should be registered and follow the format prescribed by the respective State RERA Authority.

Why Is It Important to Check These Clauses?

Even if the project is RERA-registered, you must carefully verify the agreement because:

• Some developers include unfair terms in the fine print.

• Missing clauses can limit your legal rights in case of disputes.

• The agreement is the primary document in any legal proceeding.

Now, let’s look at the key clauses you should verify.

10 Key Clauses in a RERA-Compliant Sale Agreement

1. Accurate Project Details

The agreement must clearly mention:

• Project name and location

• RERA registration number

• Sanctioned layout plan and specifications

• Exact unit details: Flat number, floor number, and block/tower

Why it matters: These details prevent any ambiguity and ensure you are buying the exact unit agreed upon.

2. Carpet Area Specification

The agreement should:

• Clearly state the carpet area

• Match the details on the RERA portal

3. Total Price and Payment Schedule

The agreement must clearly specify:

• Total sale consideration (including GST and other charges)

• Break-up of additional charges (like parking, club membership, etc.)

• Payment schedule linked to construction milestones

Why it matters: Prevents hidden charges and ensures payment is tied to project progress, not arbitrary deadlines.

4. Project Completion Date

The completion date mentioned in the agreement must:

• Match the date declared on the State RERA portal

• Include grace period (if any), which should be reasonable

Why it matters: This gives you a legally enforceable possession timeline.

5. Interest on Delay (Compensation Clause)

RERA mandates:

• If the developer delays possession, they must pay interest to the buyer at SBI MCLR + 2%.

• If the buyer delays payment, they also owe interest to the builder at the same rate.

Why it matters: This ensures financial compensation for delays, protecting both parties.

6. Cancellation & Refund Terms

The agreement should clearly state:

• Conditions for cancellation by buyer or builder

• Timeline for refund (RERA mandates refund within 90 days of cancellation)

• Deduction amount, if any

Why it matters: Helps avoid disputes during cancellations or refund claims.

7. Escrow Account Details

As per RERA, developers must:

• Deposit 70% of the project funds in a separate escrow account

• Use this money only for project construction and land cost

Why it matters: Prevents misuse of funds and reduces the risk of project delays.

8. Force Majeure Clause

This clause defines events like:

• Natural disasters

• Government restrictions

• Legal issues that prevent timely delivery

However:

• The clause should not be vague or open-ended.

• Only genuine unforeseen events should qualify.

Why it matters: Protects you from developers misusing this clause to justify unnecessary delays.

9. Structural Defect Liability

Under RERA:

• Developers are liable for structural defects or poor workmanship for 5 years after possession.

• They must fix these defects at no additional cost within 30 days of notification.

Why it matters: Ensures quality and accountability even after possession.

10. Dispute Resolution & Jurisdiction

The agreement must state:

• Disputes will be resolved under RERA Authority or RERA Appellate Tribunal

• No clauses forcing arbitration outside RERA or denying buyer’s rights under the Act

Why it matters: Ensures disputes are handled under RERA and not in unrelated forums that favor builders.

 Additional Clauses You Should Look For

• Possession Date with Penalty Clause – To safeguard against delays.

• Clear Title Certificate – Ensures the land is legally owned by the developer.

• Obligations of Buyer and Developer – Clearly defined roles and responsibilities.

• No Hidden Charges Clause – So that the builder cannot demand extra money later.

RERA Sections You Should Know

• Section 13(2): Requires a registered agreement for sale.

• Section 18: Compensation for delay in possession.

• Section 19: Rights and duties of allottees.

Conclusion

A RERA-compliant sale agreement gives you legal protection, but only if it includes all mandatory clauses. Before signing:

• Cross-verify details with the State RERA portal

• Read every clause carefully

• Consult a real estate lawyer if needed