The Real Estate (Regulation and Development) Act (RERA) serves as a crucial framework for ensuring transparency, accountability, and efficiency in India’s real estate sector. A key component of this regulatory structure is the Proforma Agreement for Sale, which defines the rights, responsibilities, and obligations of promoters (developers) and allottees (homebuyers).

MahaRERA’s Role in Enforcing Compliance

Under Section 34 of the Act, MahaRERA is responsible for:

• Registering and regulating real estate projects and agents.
• Ensuring compliance with the Act, Rules, and Regulations by all stakeholders.
• Issuing directions under Section 37 and Regulation 38 to promoters, agents, and allottees for better enforcement.

Modifications and Explanatory Notes

The model Proforma Agreement (Annexure ‘A’ of Rule 10(1)) allows modifications to accommodate specific project conditions. However, certain core clauses cannot be altered, as they ensure compliance with the Act and protect homebuyers. Any deviation from these clauses renders the agreement void ab initio (invalid from the outset).

To maintain transparency, any modifications made by the promoter must be highlighted in a deviation sheet and disclosed to the allottee. Below are the key non-negotiable clauses that must remain unchanged.

Key Non-Negotiable Clauses

1. Agent Clause (Clause 15A)

Requirement: If a Registered Real Estate Agent is involved, the agreement must clearly define who pays the agent’s fee—the promoter, the allottee, or both.

Purpose: Ensures transparency and prevents disputes over commission payments, so all parties know their financial obligations from the beginning.

2. Carpet Area Variation Clause (+/- 3%)

Requirement: After the building receives an Occupancy Certificate, the final carpet area must be confirmed. Any variation beyond 3% is not permitted. If the area is reduced, the promoter must refund the excess payment within 45 days with interest. If increased, the allottee must pay the additional amount.

Purpose: Prevents disputes over area discrepancies and ensures fair financial adjustments based on the agreed price per square foot.

3. Termination Due to Default on Installments

Requirement: If the allottee fails to pay three consecutive installments, the promoter must issue a 15-day notice to rectify the default. If unresolved, the agreement may be terminated, and the promoter must refund payments within 30 days, subject to deductions.

Purpose: Provides a fair process for termination while protecting the allottee’s rights through notice and refund obligations.

4. Society Formation Clause

Requirement: Allottees must participate in forming a housing society, association, or company for property management. The promoter must transfer rights to the society within three months after formation.

Purpose: Ensures a structured ownership and management framework, enabling allottees to collectively manage common amenities.

5. Conveyance of Project Land Within 3 Months of Occupancy Certificate

Requirement: The promoter must execute the deed of conveyance in favor of the housing society within three months of receiving the Occupancy Certificate.

Purpose: Prevents delays in property ownership transfer, ensuring allottees receive legal ownership in a timely manner.

6. Defect Liability Period (5 Years)

Requirement: The promoter is liable for structural and workmanship defects for five years after possession. Repairs must be carried out at no additional cost to the allottee.

Purpose: Protects allottees from construction defects and ensures that promoters maintain quality standards.

7. Conveyance Clause

Requirement: The promoter must transfer title ownership to the allottees within three months of the Occupancy Certificate issuance.

Purpose: Prevents unnecessary delays in transferring legal ownership rights, ensuring clear and undisputed property possession.

8. Force Majeure Clause

Requirement: The definition of force majeure (unforeseen events) must be limited to legally recognized circumstances, such as natural disasters. Promoters cannot misuse this clause to justify avoidable delays.

Purpose: Protects allottees from unfair contract extensions while allowing promoters to claim relief only for genuine uncontrollable events.

9. Parking Clause (Circular No. 60)

Requirement: Parking spaces must be explicitly allocated and documented in the agreement, specifying whether they are covered or open along with their exact size and location.

Purpose: Prevents disputes over parking allocation, ensuring allottees get what they paid for without confusion.

10. Advance Payment Clause (Max 10%)

Requirement: The promoter cannot collect more than 10% of the unit cost as advance payment before executing the agreement. All advance amounts must be deposited in RERA-designated accounts.

Purpose: Protects allottees from financial risks and ensures funds are used transparently for project completion.

11. Blanket Consent Clause

Requirement: The promoter cannot obtain blanket consent from allottees for future modifications. Any changes must be mutually agreed upon and documented.

Purpose: Ensures the original terms of the agreement remain intact, preventing unilateral changes by the promoter.

Consequences of Violating Non-Negotiable Clauses

If a promoter modifies or omits any of these clauses, the agreement may be deemed invalid, and MahaRERA may reject project registration or impose legal consequences.

For allottees, understanding these non-negotiable clauses is essential to ensure that the agreement remains legally sound, transparent, and enforceable.

Conclusion

The Proforma Agreement for Sale under RERA serves as a binding legal document that protects the interests of both homebuyers and developers. Promoters must strictly adhere to non-negotiable clauses to maintain fairness and compliance.

For expert guidance on RERA compliance and real estate transactions, reach out to ReraFirst at info@rerafirst.com. Our team is here to assist you in ensuring legally sound agreements and hassle-free property transactions.

Note on Non-Deviable Clauses

The clauses discussed above are key non-negotiable provisions as per the RERA Proforma Agreement for Sale. They must be interpreted in line with RERA’s regulations, circulars, and MahaRERA’s specific guidelines.