by Rera Consultant LLP.

An Agreement for Sale is an agreement entered into between the promoter and the allottee as per Section. 2 (c) of The Real Estate (Regulation and Development) Act, 2016 (“Act”). The definition doesn’t actually define an Agreement for Sale, however, the definition can be deduced keeping in mind the objective of the Act, an Agreement for Sale is a binding legal contract entered between the Promoter and Allottee to sell an apartment, building or plot as the case may be. The Agreement for Sale is also required to be notified under the respective state rules and all Agreement for Sale being entered between the promoter and allottees should necessarily adhere to the notified drafts. Further, the Housing Department, Government of Karnataka through its notification dated 12/06/2020 bearing No. DOH 8 RERA 2017 has notified the Agreement for Sale in Annexure – A under newly inserted Rule 8A of Karnataka Real Estate (Regulation and Development) Rules, 2017 (“Rules”). After notification of the Agreement for Sale and as per Section.13 of the Act it is now mandatory that the Promoter has to enter to Agreement for Sale in the format as prescribed for the sale of apartments, plots and villas as the case may be.

The key highlights of the notified Agreement for Sale in Karnataka are as follows:

1. The Promoter have to strictly follow the approved plans for the project and units proposed to be sold and any changes in the approved plans can be undertaken with 2/3rd consent of the allottees of the Project and in strict compliance of Section. 14 of Act.

2. The total price of the apartment /plot has to be mentioned along with detailed breakup of amounts such as cost of apartment/plot, cost of exclusive balcony/verandah/open terrace areas for apartment, proportionate cost of common areas, preferential location charges, taxes, maintenance charges.

3. Details of apartment / building shall be Carpet Area, common area etc (compare to the practices of super built up area)

4. Allottees have to pay the amounts to Promoter as per the Schedule Payment Plan, failure to pay the same the Promoter can levy interest for delay in payment of amounts.

5. The apartment/plot as sold shall not be mortgaged by the Promoter nor should create any charge.

6. The Promoter has to declare and mention the handover date of possession of apartment/plot as the case may be to allottee along with common areas and common amenities and facilities to the association. Further, if the possession is delayed due to force majeure conditions then the reasonable extension is allowed, however if the Promoter is unable to complete the project due to Force Majeure conditions and that the contract cannot be implemented then the allotment stands terminated and within 60 days the amounts has to be refunded to allottee.

7. The Promoter has to give a notice in writing after obtaining the Occupancy Certificate to allottee to take possession of apartment/plot within 60 days from date of occupancy certificate and execute the conveyance deed as per the local laws, however if the allottee fails to possession within 60 days then the allottee shall be liable to pay the maintenance charges.

8. If in case the allottees initiates the cancellation of the allotment of the apartment/plot then the Promoter shall withhold the booking amount as forfeiture fee and shall refund the remaining amounts within 60 days from date of cancellation.

9. The Promoter is liable for a period of 05 (five) years for any structural defect, defect in workmanship, quality or provision of services or any other obligations as agreed by the Promoter under the Agreement for Sale.

10. The Promoter shall now have to compulsorily declare that the project is now in accordance with the provisions of Karnataka Apartment Ownership Act, 1972 and Karnataka Ownership Flats (Regulation of the Promotion of the Construction, Sale Management and Transfer) Act, 1972 which means that the allottees shall also have to follow and comply with all the provisions of the aforementioned acts.

11. There are many more clauses of important and relevance for all the stake holders viz., Allottees, Promoters, lenders, professionals while entering into Sale Agreement.

12. The Promoter and Allottee can enter any additional clauses, however the said clauses shouldn’t be in contravention of the provisions of the Act and Rules.

Further, as per Section.13(1) of the Act, Agreement for Sale needs to be executed with allottee if the promoter intends to accept a sum more than 10% (ten percent) of the cost of the apartment/plot and such that Agreement for Sale has to be registered.

Further, as per Section.13(1) of the Act, Agreement for Sale needs to be executed with allottee if the promoter intends to accept a sum more than 10% (ten percent) of the cost of the apartment/plot and such that Agreement for Sale has to be registered.As the notified Agreement for Sale has inserted a note stating that any additional clauses can be added by the Parties, however not being in contravention to provisions of Act and Rules, the Parties can insert clause such as Assignment in order to avoid the process of cancellation and reallotment. However, the ambiguity and grey areas still remains unanswered over cancellation of Agreement for Sale due to death of Allottee/s as the same will be registered.


  • This article is to be published in the September Volume of NAREDCO.
  • This post underlines the information as per the notified Agreement for Sale as available in last visited on 29th August, 2020 at 08:00 pm; and
  • We recommend the Promoters to seek the assistance of the Professionals involved in the real estate practice in case of any queries, clarifications with respect to advertisement of the real estate project.


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