When a real estate property is sold by a promoter or real estate agent to a buyer, a legal document is laid down to establish the terms and conditions of the sale and purchase. This sale-purchase agreement is known as a builder-buyer agreement.
A buyer-buyer agreement lays down all the provisions relating to a real estate property between a builder and buyer and acts as one of the most important documents in case of a conflict between them.
A builder-buyer agreement is signed by the promoter and buyer when the allotment letter has been given to the buyer and the property is under construction. The agreement lays down the details like the price, layout, delivery date, payment mode, etc. between the buyer and builder.
In most cases, it has been found that builders get a one-sided agreement signed by the buyers that favour only the former’s interest and has no provisions to protect the homebuyers in case of default or fraud by the builder. Recently, the Supreme Court also held that the builder cannot bind a buyer in a one-sided agreement that favours only the builder.
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Provisions Of Builder-Buyer Agreement
Due to the increasing number of cases wherein homebuyers suffer at the hand of builders, it becomes important to get the builder-buyer agreement drafted and reviewed by an expert documentation lawyer. The lawyer will ensure that the builder-buyer agreement is made in accordance with the provisions of RERA Act, 2016 and includes the following key provisions:
- Details of builder and buyer: The builder-buyer agreement must include the details of the buyer and builder like name, address, etc.
- Delivery Date of Property: The agreement must also include the date on which the possession is to be delivered by the builder to the buyer. The provision must layout the dates by which the different stages of the property will be completed.
- The layout of the project: The agreement must also include the complete layout of the project including the furniture and fixtures, facilities, parking lot, etc.
- Cost of the property: The agreement must mention the price at which the property is sold to the buyer. This provision must lay down the complete breakdown of the payment i.e. how much payment is already made, when the next instalment is to be paid, the mode of payment, etc. This provision is important as the builder cannot ask for more than 10% of the total value before signing the agreement.
- Cancellation and Refund: The builder-buyer agreement must also state the cases in which the buyer can cancel the booking and ask for a refund from the builder. This provision protects the homebuyer’s investment in cases of defrauding or default by the builder and when the buyer wishes to withdraw from the project.
- Interest on Delay in Possession: The agreement must also mention the percentage of interest that the builder will be liable to pay in case of delay in possession of the property for every month till the possession is given.
- Interest on Delay in Payment: The agreement must state the percentage of interest that the buyer will be liable to pay in case of delay in payment to the builder.
- Completion Certificate: The agreement must state that the builder will be liable to obtain the Completion Certificate and provide it to the buyer after the project is completed.
The builder-buyer agreement is used as evidence in case the buyer wants to file a complaint under RERA against the builder for delay in possession or any other form of violation by the builder. LetsComply‘s documentation experts help in drafting and vetting of a balanced builder-buyer agreement that protects the interest of both the parties. LetsComply also helps homebuyers in filing a complaint in RERA against the builder. Call us at +91-9717070500 or send an email at firstname.lastname@example.org.