What to Check Before Signing a Real Estate Agreement (India 2025...

What to Check Before Signing a Real Estate Agreement (India 2025 Guide)

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Buying a home—or any piece of property—is exhilarating, but it’s also one of the most legally complex purchases you’ll ever make. The sale agreement is the backbone of the deal: it captures everything you and the seller have promised each other. Miss one hidden clause or overlook a missing approval, and you could be staring at costly delays—or, worse, a lawsuit.

Below is an India‑specific checklist (updated for 2025) that walks you through the critical items to verify before you pick up the pen. Use it as a reference, but always consult a qualified property lawyer for a line‑by‑line review.

1. Title & Ownership: Does the Seller Really Own What They’re Selling?

Mother Deed / Sale Deed chain – Trace the chain of ownership back at least 30 years.

Encumbrance Certificate (EC) – Obtain the EC from the sub‑registrar to verify the property is free from mortgages, liens, and court attachments.

Possession Status – If it’s a flat, confirm that the builder still holds legal title until registration in your name.

Why it matters: A defective title can nullify the entire agreement—no bank will release your loan, and you could lose your advance money. linkedin.com

2. RERA Registration & Project Compliance

Under the Real Estate (Regulation & Development) Act, 2016, every new project with more than eight units must be registered on the state RERA portal. Ask for the RERA Registration Number and cross‑check:

Has the project’s land been mortgaged?

Are approvals (layout plan, building plan, environmental clearance) uploaded and valid?

Tip: Never rely on a sales brochure alone—RERA filings override marketing claims. khaadvocates.com

3. Approved Plans, CC & OC

Sanctioned Building Plan – It should match the actual construction on site.

Commencement Certificate (CC) – Issued by the municipal authority before construction begins.

Occupancy Certificate (OC) / Completion Certificate (CC‑Final) – Mandatory for taking possession; agreements that force buyers to accept “canvas” (unfinished) flats violate RERA and can incur penalties up to 5 % of project cost. timesofindia.indiatimes.com

4. Layout Area: Carpet vs. Built‑up vs. Super Built‑up

RERA mandates that all ads and legal documents specify carpet area—the usable area inside your walls. Builders often quote super built‑up to make prices look lower. Insist that the price‑per‑sq‑ft clause is tied to carpet area, not super built‑up, and that any change beyond 3 % triggers a refund or price reduction. nobroker.in

5. Payment Schedule & “Other Charges”

A favorite red‑flag wording is: “Other charges as applicable.” Ask for a fully itemized list covering club‑house fees, power‑backup deposits, legal charges, GST, and maintenance. Insert a clause that forbids any surcharge not disclosed in writing on or before signing. timesproperty.com

6. Penalty for Delayed Possession—and for Delayed Buyer Payments

Your agreement should:

Specify a clear possession date (DD‑MM‑YYYY), not “36 months from launch.”

Impose an interest rate (e.g., SBI MCLR + 2 %) on the builder for every month of delay.

Allow you to terminate and get a full refund plus interest if the delay exceeds a stated grace period.

Conversely, check the default clause for buyer delays—often builders charge 18 % or higher. Negotiate parity: if you pay 12 % for default, the builder must also pay 12 % for delays.

7. Force Majeure & Cancellation Terms

Post‑COVID, many agreements expanded “force majeure” to include pandemics, government embargoes, and supply‑chain issues. Ensure it is narrowly defined and time‑bound. Likewise, confirm you can exit the deal and reclaim at least 80–90 % of payments if a bank refuses your loan or the builder modifies project specs without consent. legalparihar.in

8. Amenities, Specifications & Variation Limits

Builders often promise luxury fittings and clubhouse upgrades in glossy brochures. Add an annexure that lists every promised amenity (pool size, gym equipment count, flooring brand, ceiling height). Include a variation clause capping any change in materials or amenity size to 5 % unless you approve in writing.

9. Defect‑Liability Period (DLP)

RERA mandates a 5‑year defect‑liability period for structural flaws starting from possession. Insist on a clear definition of defects and a repair window (usually 30 days). This clause often surfaces only in the final sale deed—make sure it appears in the agreement too. ghar.tv

10. Common‑Area Maintenance (CAM) & Society Formation

Ask for a provisional CAM estimate and escalation cap (say, 10 % a year).

Verify that the builder will form a Resident Welfare Association (RWA) within a fixed time and hand over the sinking fund.

Confirm the builder will pay CAM charges on unsold units—otherwise, existing owners foot the bill.

11. Dispute Resolution & Jurisdiction

Most agreements choose the builder’s city as the sole legal forum. Push for arbitration in your home state or at least a neutral venue. Also, include an option to approach RERA or consumer courts—the builder cannot waive statutory remedies, but explicit mention strengthens your hand.

12. Stamp Duty, Registration & Tax Deductions

The buyer usually pays stamp duty (5–7 % in most states) and registration fees (~1 %). Confirm who bears each cost and the exact payment timeline. For under‑construction property, GST (currently 5 % on non‑affordable units) applies; resale properties are GST‑exempt. Note that you can claim Section 80C tax benefits only after registration is complete.

Final Thoughts

In 2025, India’s property market is bustling again, but scams and gray areas still lurk. A watertight agreement isn’t just paperwork—it’s peace of mind. Spend a few extra days (and rupees) on due diligence now to avoid months or years fighting for what was rightfully yours later. When in doubt, hire a specialist real‑estate lawyer, get every promise in writing, and never sign a blank or “standard” agreement handed over by the builder’s office runner.