A builder buyer agreement is a legally binding agreement between a real estate developer and a homebuyer that sets out the terms of a property purchase. For Bengaluru buyers, it should clearly cover the property, price, payment schedule, possession timeline, specifications, cancellation terms and responsibilities of both parties. This guide explains the key builder buyer agreement clauses, RERA requirements and what to check before signing.
What Is a Builder Buyer Agreement?
A Builder Buyer Agreement (BBA), commonly referred to as an Agreement for Sale under RERA, is the contract between the promoter and the buyer that records the terms of the property transaction.
It typically covers the property details, sale consideration, payment schedule, possession timeline, construction specifications, amenities, cancellation terms, default provisions and responsibilities of both parties. By putting these terms in writing, the agreement establishes what the builder and buyer are expected to do throughout the transaction.
For an under-construction property, the agreement is particularly important because it sets out the terms governing construction, payments, possession and handover.
Builder Buyer Agreement and RERA
The Real Estate (Regulation and Development) Act, 2016 establishes important requirements for agreements between promoters and buyers.
Under Section 13 of RERA, a promoter cannot accept more than 10% of the cost of an apartment, plot or building as an advance or application fee without first entering into a written agreement for sale and registering it.
RERA also requires promoters to adhere to sanctioned plans and project specifications, subject to the changes permitted under the Act. Buyers should compare the agreement with the project's RERA-registered information on the official Karnataka Real Estate Regulatory Authority (K-RERA) portal. Search the project using its RERA registration number, project name or promoter name, then check the registered project details, declared completion or possession timeline, approved plans and other disclosures against the information provided in the agreement and sales materials. Karnataka RERA portal
The builder buyer agreement should be reviewed carefully before signing, particularly before making payments beyond the applicable RERA threshold.
What Clauses Should a Builder Buyer Agreement Include?
A builder-buyer agreement sets out the terms governing the purchase of the property, including the unit being sold, payment obligations, possession, construction specifications and the consequences of delays or defaults. Before signing, buyers should check that the agreement accurately reflects the project's RERA-registered details and clearly records the commitments made by the builder.
Property Details
The agreement should accurately identify the project, phase, tower, block, floor and apartment number. It should also state the carpet area, applicable balcony or terrace areas, parking details and promised specifications or amenities. These details should be consistent with the project's RERA-registered information and other documents provided by the builder.
Sale Price and Payment Schedule
Check the total sale consideration, payment milestones, taxes and statutory charges, maintenance or other one-time charges, parking charges where applicable, and interest or penalties for delayed payments. The payment schedule should match the terms agreed during booking.
Possession Date
The agreement should state a clear possession timeline. Check that it is consistent with the project's RERA-registered details and review the provisions covering handover, applicable certificates and the buyer's rights if possession is delayed.
Construction Specifications and Amenities
The specifications promised for the apartment and common areas should be clearly recorded. Check provisions covering finishes, flooring, fixtures, electrical and plumbing specifications, parking, clubhouse facilities, landscaping and other promised amenities. Important commitments should not exist only in brochures or verbal assurances.
Cancellation and Termination
Check the circumstances in which either party can terminate the agreement, notice requirements, refund provisions, any cancellation charges or amounts the builder is contractually entitled to retain, interest obligations and the time allowed to rectify a default. The buyer should understand these provisions before signing.
Delay, Default and Possession
The agreement should explain the consequences if either party fails to meet its contractual obligations. For builder delays, check provisions relating to delayed possession, interest or compensation, refund or withdrawal rights and the process for making a claim. For buyer defaults, review provisions covering delayed payments, interest, notices and cancellation. Depending on the circumstances, RERA may also provide statutory remedies.
Builder Buyer Agreement Format: What to Check Before Signing
For projects covered by the Karnataka RERA Rules, buyers should check the builder-buyer agreement against the prescribed model Agreement for Sale and the project's RERA-registered details. The agreement may contain project-specific terms, but it should not contradict the applicable RERA requirements.A builder buyer agreement sample can help a buyer understand the general structure, but the actual agreement should reflect the specific project, apartment, payment schedule, specifications and applicable legal requirements.
For a Bengaluru property, check the following before signing:
The project's RERA registration and registered details.
The apartment number, tower, floor and carpet area.
The total sale consideration and additional charges.
The payment schedule and milestone conditions.
The possession date.
The specifications and promised amenities.
Parking and other exclusive-use provisions.
Cancellation, default and refund provisions.
Force majeure and delay provisions.
Defect liability and handover terms.
All annexures, schedules and referenced documents.
Any blank spaces or unresolved changes in the agreement.
Compare the agreement with the project's RERA information and other property documents. Resolve material discrepancies with the builder in writing before signing.
Builder Buyer Agreement vs Sale Deed
A builder buyer agreement records the contractual terms of the property purchase between the promoter and buyer. A sale deed or conveyance deed is used to formally convey ownership to the buyer, subject to the applicable legal requirements.
The two documents serve different purposes. The builder buyer agreement establishes the terms of the transaction, while the sale deed or conveyance deed is associated with the formal transfer of ownership.
How alldoors Can Help
Buying an under-construction property involves more than comparing the quoted price. Buyers should review the project's RERA details, property documents, payment terms and builder buyer agreement before committing to the purchase.
alldoors helps Bengaluru homebuyers research properties and compare project information so they can make a more informed decision before moving ahead with a purchase.
