RERA Rule: Register Agreement for Sale Before Taking More Than 10% (By CA Lalit Pawar)
The Real Estate (Regulation and Development) Act, 2016 (RERA), aims to create a balanced and transparent environment for both promoters (developers) and homebuyers. One of the most important provisions in this regard is the requirement that a promoter must register the Agreement for Sale (AFS) before accepting more than 10% of the property’s price from the homebuyer. This rule is designed to protect homebuyers from potential exploitation and ensure that their investments are secure. As a Chartered Accountant and RERA consultant, I, CA Lalit Pawar, often emphasize the significance of this provision to both promoters and homebuyers. Let’s delve into the details of this critical requirement.
📜 Understanding the Agreement for Sale (AFS):
The Agreement for Sale (AFS) is a legally binding document that outlines the terms and conditions of the property sale between the promoter and the homebuyer. It includes crucial details such as:
- Property Description 🏘️
- Sale Price 💰
- Payment Schedule 📅
- Possession Date 🗓️
- Specifications and Amenities ⚙️
- Rights and Responsibilities of both parties 🤝
The 10% Rule: Safeguarding Homebuyers’ Interests
RERA mandates that a promoter cannot accept more than 10% of the property’s sale price as an advance or booking amount unless the Agreement for Sale (AFS) has been duly registered. This provision is intended to:
- Prevent Unfair Practices: Restricts promoters from collecting large sums of money from homebuyers without a formal, legally binding agreement in place.
- Ensure Transparency: Makes the terms and conditions of the sale transparent to both parties.
- Protect Homebuyers’ Investments: Gives homebuyers legal recourse in case of disputes or project delays.
- Reduce the Risk of Fraud: Minimizes the possibility of fraudulent activities by ensuring that the agreement is registered and legally enforceable.
Consequences of Non-Compliance:
Promoters who violate this provision face serious consequences under RERA, including:
- Financial Penalties: RERA authorities can impose significant financial penalties for non-compliance.
- Legal Action: Homebuyers can file legal complaints against promoters for violating RERA regulations.
- Reputational Damage: Non-compliance can damage the promoter’s reputation and erode trust with homebuyers.
The Registration Process:
The registration of the Agreement for Sale (AFS) typically involves the following steps:
- Drafting the AFS: The AFS must be drafted carefully, outlining all the terms and conditions of the sale.
- Payment of Stamp Duty and Registration Fees: Stamp duty and registration fees must be paid as per the applicable state laws.
- Submission of Documents: The AFS and other required documents must be submitted to the sub-registrar’s office for registration.
- Verification and Registration: The sub-registrar verifies the documents and registers the AFS.
Benefits of Registering the AFS:
Registering the Agreement for Sale (AFS) offers several benefits to both promoters and homebuyers:
- Legal Validity: Confers legal validity to the agreement, making it enforceable in a court of law.
- Protection of Rights: Protects the rights and interests of both parties.
- Clarity and Certainty: Provides clarity and certainty regarding the terms and conditions of the sale.
- Reduces Disputes: Minimizes the potential for disputes and conflicts.
Conclusion: A Key Provision for a Fair Real Estate Market
The requirement that promoters must register the Agreement for Sale (AFS) before accepting more than 10% of the property price is a crucial provision under RERA. It promotes transparency, protects homebuyers’ interests, and fosters a more ethical and responsible real estate sector.
For More information, please refer original order @ MahaRERA Website:
Blog by CA Lalit Pawar
Promoter must register agreement for sale before accepting more than 10% of price
Disclaimer: This blog provides general information about the RERA requirement regarding the Agreement for Sale. For specific legal advice and guidance related to your situation, please consult with a RERA expert or refer to the official MAHARERA website (maharera.maharashtra.gov.in).
Note: As per ICAI guidelines, please remember that this content is for informational purposes only and does not constitute professional advice. Consult a qualified professional for specific guidance related to your situation.