At one point, stalled real estate projects plagued the Indian real estate market, causing buyers’ money to become trapped in such incomplete projects. There was no reliable recourse or process in place for displeased homebuyers prior to the implementation of RERA. However, one document that safeguards the rights of homebuyers and guarantees that the delivery is in compliance with the agreed terms and conditions is the Builder Buyer Agreement.
The importance of the Builder Buyer Agreement has multiplied in light of the Supreme Court’s directive to draft an agreement that complies with the Real Estate (Regulation and Development) Act, 2016. Let us learn more about the agreement and know why it is important.
What is a Builder Buyer Agreement?
A Builder Buyer Agreement is actually the ‘Agreement for Sale.’ It attests that the concerned property is transferred in the name of the new owner, pursuant to a mutually agreeable set of terms and conditions. This agreement controls the whole property deal. It contains terms, conditions, and peculiarities pertaining to the sale or transfer of property.
Pointers To Check Before Signing a Builder Buyer Agreement
It is a key document that specifies the terms and conditions of real estate sales and handover. However, due to the fact that this is a legal document, the purchaser must make sure of the following:
- The buyer of the property must make sure that the personal information, including the name, father’s name, address, PAN card, and Aadhar card, is accurate because it can be difficult to alter the agreement, later on.
- The buyer must carefully examine the terms and conditions before signing the contract and confirm that the builder has secured all required approvals.
- Before signing the agreement, the homebuyer must make sure that all necessary paperwork has been approved by RERA, including the Commencement Certificate (CC), Fire NOC, and municipal permissions.
- The purchaser must confirm that the concerned property has no encumbrances, which refer to the debt or mortgage placed on the subject property. Additionally, the purchaser may request the “No-Encumbrance Certificate” which would list all borrowing occurrences and any active loans secured by the property.
- The buyer must confirm that the clause specifically states what will happen if any party defaults.
- The builder’s obligations under the agreement must be upheld if the buyer is thinking about purchasing a house that is still under construction.
Charges Associated With Registration of Builder-Buyer Agreement
The Builder Buyer Agreement (BBA) is not registered in several states. However, RERA stipulates that the homebuyer must register the Agreement for Sale with 10% of the purchase price at the time of booking.
Once the conveyance has taken place, the homebuyer will pay the stamp duty, which can be adjusted depending on the amount paid at the time of booking.
Builder Buyer Agreement Format
It is a document that lists all of the project’s deliverables and amenities in great detail. It also serves as a guide for the rules that apply in circumstances of default by any concerned party.
Despite the fact that there isn’t yet any established or standard structure for this document, we are attaching an example Builder Buyer Agreement (BBA) format in accordance with the RERA regulations.
Typically, a Builder Buyer Agreement contains details like Name of the Buyer, Name of the Builder, Address of the Property, Area of the Property, Built up area, Clauses related to Buying, Installment Schedule, Details of Amenities Provided, Cancellation Charges, etc.
In conclusion, the Builder Buyer Agreement, which is legally obligatory on the real estate developer, is a key document governing the interests of homebuyers, and the concerned authorities must work to create a standard, RERA-approved Builder Buyer Agreement structure.
It is important for a homebuyer to go through the agreement properly and understand each clause before signing it. If any confusion takes place, it should be cleared beforehand so that there occurs no issue during the procedure of purchase.
Achyut Group is a trusted brand due to its ethical values among the customers, vendors, and competitors. We believe in creating environment-friendly green buildings by conserving energy, water, and wood. The promoters of Achyut Group combine over 20+ years of experience in the construction legal, finance, and marketing sectors.