Terms & Condition

In India, real estate transactions are primarily governed by the Indian Contract Act (1872), the Transfer of Property Act (1882), and most critically for new developments, the Real Estate (Regulation and Development) Act (RERA), 2016.

The following are the essential terms and conditions required for a real estate company operating in India:

1. Parties and Property Identification

Accurate Identification: Clearly define both the buyer (allottee) and seller (promoter) with full legal names, ages, and residential addresses.
Detailed Property Description: Include specific unit details such as flat number, floor, tower, carpet area (as per RERA standards), and sanctioned layout plans to avoid ambiguity.
Title Verification: The seller must prove they have a clear, marketable, and "nil encumbrance" title to the land.

2. Financial Terms and Payment Schedule

Sale Consideration: Explicitly state the total purchase price, including taxes (like GST), maintenance deposits, and any additional charges for amenities or parking.
Payment Milestones: Payments should be linked to specific construction milestones rather than arbitrary dates.
Escrow Compliance: For new projects, 70% of buyer payments must be deposited in a separate escrow account to be used strictly for construction and land costs.

3. Possession and Completion Dates

Fixed Possession Date: Agreements must mention an exact date for project completion and possession that matches the date declared on the RERA portal.
Grace Period: A reasonable grace period (typically 6 months) for possession may be included.
Delay Compensation: If the developer delays possession, they must pay interest to the buyer (typically at SBI MCLR + 2%). Conversely, buyers owe the same rate for payment delays.

4. Legal Protections and Liabilities

Structural Defect Liability: Developers are legally liable for structural defects or poor workmanship for 5 years after possession and must fix them within 30 days of notification at no cost.
Force Majeure: Define specific unforeseen events (natural disasters, government restrictions) that may excuse delays, though this clause cannot be open-ended.
Indemnity Clause: Protects the buyer against any future legal disputes regarding the property's title or previous liabilities.

5. Termination and Dispute Resolution

Cancellation and Refunds: Clearly state conditions under which a party can cancel. RERA mandates that refunds must be processed within 90 days of cancellation.
RERA Jurisdiction: Disputes must be resolved through the RERA Authority or the RERA Appellate Tribunal rather than forcing unrelated arbitration.

6. Statutory Compliance

Registration: A "Sale Agreement" is a promise of future transfer, while a "Sale Deed" is the final document that must be registered with the Sub-Registrar to legally transfer ownership.
Occupancy Certificate (OC): The building must obtain an OC from local authorities to be considered fit for legal habitation.

Legal Note: These terms are general guidelines. Real estate laws and stamp duty rates (typically 5–7%) vary significantly by state. It is strongly recommended to have a legal professional review all documents for state-specific compliance.