LLP Builder Buyer Agreement Review

Here is a practical guide to buyer agreement review when an LLP is involved, written for owners, buyers and families in Delhi NCR and elsewhere in India. The firm of Advocate B.K. Singh handles this work from offices in Dwarka, New Delhi and Vaishali, Ghaziabad.

In short. A builder buyer agreement review is a clause-by-clause legal check of the agreement for sale a promoter asks you to sign. It compares the draft with RERA, the model agreement in your state's RERA rules and the builder's approvals, and flags one-sided terms on carpet area, payment plan, possession date, delay interest, cancellation, parking and maintenance, so you can ask for corrections before signing and registration.

The builder buyer agreement, called the agreement for sale under RERA, is the document that governs your purchase for years until the conveyance deed is registered. It fixes what you are buying, what you will pay and when, when you will get possession, what happens if either side defaults, and who maintains the building. Most buyers receive a long printed draft, are told it is a standard format, and sign it at the registration office without reading past the first page.

That standard format is often not standard at all. RERA requires the agreement to follow the model in the state's RERA rules, and terms that conflict with the Act or those rules do not bind the buyer. A review identifies those terms before you sign, gets the important ones corrected in writing, and leaves you with a clear note of your rights, so that if the project runs late or the final demand is inflated, you are not arguing from a weak document.

Law

RERA 2016 (ss.2, 11, 13, 14, 15, 17, 18, 19), the agreement for sale format in the Delhi, UP or Haryana RERA rules, Transfer of Property Act 1882, Registration Act 1908, Indian Stamp Act 1899 and state stamp laws, Indian Contract Act 1872 and Consumer Protection Act 2019.

Forum

No forum is needed for the review. Disputes later go to the state RERA authority, the consumer commission or, for matters outside RERA, the civil court. The agreement itself is registered at the Sub-Registrar's office.

Time limit

Before signing, and before paying more than 10 percent of the cost, which section 13 of RERA forbids the builder to take without a registered agreement. Leave enough time to get corrections made before the registration appointment.

Documents

Draft agreement with all annexures, allotment letter, brochure and price list, RERA registration details, sanctioned building plan, title documents of the land if provided, payment receipts, and the bank's loan sanction and tripartite agreement draft.

What a builder buyer agreement is

A builder buyer agreement is a contract in which a promoter agrees to sell, and you agree to buy, a specific apartment, plot, floor or commercial unit in a project, usually under construction, for a stated price on stated terms. Under RERA it is called the agreement for sale. It is not a sale deed: ownership passes only when the conveyance deed is registered after completion, so until then the agreement is your main protection.

RERA changed the rules in two ways. Section 13 bars the builder from taking more than 10 percent of the cost as an advance or application fee without first executing a written agreement for sale and registering it. And the agreement must be in the form prescribed by the state's rules, with the Act and the rules prevailing over any inconsistent term the builder adds. The model formats in the Delhi, UP and Haryana RERA rules set minimum protections on area, delay interest, cancellation and defects.

In practice many drafts reproduce the model format and then add clauses, annexures or a separate set of terms and conditions that cut back those protections. Others are pre-RERA style agreements used in ongoing projects. The review is about spotting the difference between what the law requires and what the draft says.

When the review should be done

The right time is after you receive the draft and before you sign it, ideally before you pay the instalment that takes you over 10 percent of the price. At that stage the builder still wants your signature and your money, and minor corrections, such as fixing the carpet area, the possession date or the parking allotment, are usually possible. After registration, any correction needs a fresh registered document or a complaint.

A review is also worth doing when you buy a unit on resale from an earlier allottee, because you take over that buyer's agreement and its terms; when you take a home loan, because the bank's tripartite agreement adds obligations; and when the builder asks you to sign a supplementary agreement or addendum midway, often to change the payment plan, the area or the possession date. Addenda signed under pressure are a common source of later disputes.

If the agreement has already been registered, a review still helps. It tells you which clauses are unenforceable and how to use the agreement if a dispute arises, and it identifies obligations you might otherwise breach, such as deadlines for payment or for taking possession.

Key clauses: what fair looks like and what to question

How a buyer agreement review works

The review is mainly a careful reading against the law and the builder's own documents, followed by a short report and, where needed, a correction letter.

1. Gather the full draft and the builder's documents

   We ask for the complete draft with every schedule and annexure, the allotment letter, the brochure, the price list and the RERA registration details. Annexures are where payment plans, specifications and common area lists sit, and they are often missing from the copy given to buyers.

2. Compare with the state model agreement

   Each clause is compared with the agreement for sale format in the applicable RERA rules. Departures that reduce the buyer's rights are marked, because the Act and rules prevail over them.

3. Check the project and title

   We check the RERA registration, the approved plan, the promoter's title or development rights over the land, and any mortgage disclosed on the RERA page, so the agreement's description of the land and the promoter's rights matches the records.

4. Mark one-sided and missing terms

   Clauses on area, payment, possession, delay, cancellation, parking, maintenance, transfer and disputes are marked as acceptable, negotiable or unenforceable. Missing terms, such as a fixed possession date or the specifications, are listed separately.

5. Write the note and the correction request

   You receive a short written note with the points that matter, in order of importance, and a draft letter to the builder asking for specific corrections before registration. You decide what to press and what to accept.

When Advocate B.K. Singh reviews a builder buyer agreement, he reads the annexures first, because the payment plan, the specifications and the list of common areas are usually where the draft departs from what the buyer was told.

Carpet area, common areas and parking

RERA requires sale on carpet area, defined in section 2(k) as the net usable floor area excluding external walls, service shafts, exclusive balconies and exclusive open terraces, but including internal partition walls. The agreement should state the carpet area, the areas of any exclusive balcony or terrace separately, and the price on that basis. A draft that only quotes super area or saleable area should be corrected.

The area variation clause matters at possession. The model agreements generally allow a small variation without change in price, require the builder to refund for any reduction, cap charges for any increase, and let the buyer withdraw if the change crosses the limit. Check that the draft follows the figure in your state's model and does not let the builder charge for increases while ignoring decreases.

Common areas, defined in section 2(n), include open parking areas, and open parking generally cannot be sold separately. Covered parking or a garage can be allotted with the unit, and the agreement should say so with the parking number or at least the type. Check also that terraces, basements and amenities are not reserved for the builder, and that the club, if any, is part of the common areas rather than a separate business the builder will run.

Price, payment plan, taxes and extra charges

The price clause should state the total consideration and list everything included. Check whether preferential location charges, external and internal development charges, power backup, club membership, interest-free maintenance security, lease rent for authority land, and the cost of electricity and water connections are inside the price or will be demanded later. Every charge that is not in the agreement is open to challenge when it appears in the final demand.

The payment plan should be linked to construction stages that can be checked, such as foundation, each slab, brickwork and finishing, and should not ask for more than 10 percent before registration. Escalation clauses, which let the builder raise the price for higher costs of material or labour, are generally unfair in a fixed-price sale and should be removed or capped.

Taxes need clarity. Under-construction residential units attract GST at the rate notified for such property, currently a reduced rate without input tax credit; completed units sold after the completion certificate do not attract GST. The agreement should say that any reduction in tax rates is passed on, and that the builder bears taxes and charges relating to the period before possession. Stamp duty and registration fees on the agreement and the conveyance are usually the buyer's cost, so ask for an estimate early.

Possession, delay interest and force majeure

The possession clause should give a fixed date and a stated grace period. Watch for possession dates that run from the date of the agreement, the start of construction or the approval of plans without saying when those happened, and for clauses that let the builder extend the date by notice. The date should match, or be earlier than, the completion date declared on the RERA registration.

Delay must carry interest at the rate in the state rules, which under the Act must equal the rate the builder charges you for late payment. In Pioneer Urban Land and Infrastructure v Govindan Raghavan (2019), the Supreme Court held that one-sided clauses in a builder buyer agreement amount to an unfair trade practice and do not bind the buyer. A token delay compensation clause is a classic example, and it should be replaced with the rule-based rate.

Force majeure should be limited to what RERA recognises: war, flood, drought, fire, cyclone, earthquake and other natural calamities affecting the project. Lists that add labour or material shortages, defaults by other buyers, court orders obtained by third parties or delays in approvals should be narrowed. The clause should also say that the builder must notify the buyer of a force majeure event and its expected effect, rather than invoking it years later.

Cancellation, forfeiture and transfer

The cancellation clause should work both ways. The builder can cancel for your default only after written notice and a reasonable period to pay, and can forfeit only the booking amount or a modest percentage, as the state model allows. Consumer commissions have generally treated forfeiture of about 10 percent of the price as a reasonable outer limit. The balance, with any taxes paid, should be refunded within a fixed time.

Your right to exit should be stated clearly: if the builder fails to give possession on time, or changes the plan or specifications without your consent, you can withdraw and recover everything paid with interest under sections 14 and 18 of RERA. A clause that makes you pay forfeiture even when the builder is in default is contrary to the Act.

Transfer before conveyance usually needs the builder's consent and a transfer fee. Check whether the draft restricts resale until a certain stage, how the fee is calculated, and whether the builder can refuse consent. If you are buying on resale, the transfer must be endorsed by the builder and the buyer's rights, including any delay claims, should be dealt with in the transfer agreement.

Title, approvals and the builder's mortgage

The agreement should describe the land, the promoter's title or development rights over it, and the approvals obtained, including the building plan sanction and, in Haryana, the licence from the Department of Town and Country Planning. Where the land belongs to a landowner who has signed a collaboration or development agreement with the builder, check that the landowner is bound by the sale or has authorised it. For authority land in Noida, Greater Noida, YEIDA or GDA, the land is held on lease, and the builder's dues to the authority can affect registration of your conveyance.

Builders often mortgage the project to raise construction finance. Section 11(4)(h) of RERA bars the builder from mortgaging a unit after an agreement for sale has been executed for it, and says that any such mortgage does not affect the buyer's rights. The agreement should disclose existing charges and say that the builder will get your unit released from them before conveyance. A no objection from the project lender is useful where a home loan is involved.

Section 15 of RERA prevents the builder from transferring its majority rights in the project to another person without the written consent of two-thirds of the allottees and the authority's approval. A clause in which you give advance consent to any such transfer, or to changes in the plan, should be struck out.

Provisions behind a buyer agreement review

Defects, maintenance, the association and conveyance

Section 14(3) of RERA makes the builder responsible for structural defects and defects in workmanship, quality or services reported within five years of possession, to be rectified within 30 days without charge, failing which you are entitled to compensation. A draft that shortens this period, limits liability to a year, or excludes common areas should be corrected.

The builder must maintain the project until the association of allottees takes over, and must enable formation of the association within three months of a majority of units being booked. Check the maintenance clause for long contracts with the builder's own agency, maintenance charges beginning before a valid possession offer, and a large maintenance security without any accounting obligation. These clauses tend to last well beyond possession.

The agreement should commit the builder to execute and register the conveyance deed within the period in RERA, which in the absence of local law is three months from the occupancy certificate, and to transfer the common areas to the association. Many buyers in NCR waited years for conveyance after possession because their agreements were vague on this point.

Disputes, jurisdiction, powers of attorney and indemnities

Look at the dispute clause. Exclusive jurisdiction of courts in a city far from the property, or mandatory arbitration by an arbitrator chosen by the builder, are common. An arbitration clause does not take away your right to approach RERA or the consumer commission, but it can be used to delay matters, so it is better made optional.

Some drafts include a power of attorney in favour of the builder, letting it sign documents, apply for approvals or even change plans on your behalf. Such powers should be limited to specific acts, such as applying for electricity connections, and should not allow changes to your unit, the plan or the common areas without fresh consent.

Indemnity clauses that make the buyer liable for the builder's violations, taxes for periods before possession, or penalties imposed on the project are one-sided. The buyer should indemnify only for his own defaults, such as unauthorised alterations after possession.

How the review changes with the property type

For a flat in a group housing project, focus on carpet area, parking, common areas, possession and the conveyance timeline. For a penthouse or a unit sold with exclusive terrace rights, confirm that the terrace is shown in the sanctioned plan as attached to the unit, that it is excluded from carpet area but priced separately, and that the builder does not reserve rights to add floors or install equipment over it. For a builder floor, check that the floor you are buying is within the sanctioned number of floors.

For a plot in a township or licensed colony, check the layout approval, the plot dimensions, the development works the builder must complete and the date for each. For a shop, office, godown or warehouse, check the permitted use, fire and occupancy approvals, any assured return or lease arrangement, and whether common area maintenance is charged on super area. Commercial buyers should remember that consumer commissions may treat them as investors, which makes the RERA remedies in the agreement more important.

For agricultural land sold through a builder agreement, as farmhouse plots or land shares, check whether the land has a change of land use, whether the project is registered under RERA, and whether state law restricts its transfer: Delhi's land reform law, UP's Revenue Code and Haryana's colony licensing law all bear on this. For an undivided share of land, the agreement should describe the share precisely and say how it relates to the unit, because an undivided share without a defined portion often leads to partition disputes later.

How the review changes with who is buying

An NRI buyer should make sure the agreement allows execution and registration through a power of attorney holder in India, that payments are made through permitted channels, and that refunds go back the same way. A company or LLP buyer should have a board or partner resolution authorising the purchase and should check whether the unit's permitted use matches its intended use.

Where a bank or housing finance company is funding the purchase, the tripartite agreement between you, the builder and the lender should be read with the buyer agreement. Check who pays pre-EMI interest under any subvention scheme, what happens if the builder stops paying, and how a refund will be split between the bank and you. The builder's project lender's no objection to your loan is also worth asking for.

Joint buyers should be named with their shares if unequal, and the agreement should say how notices are given and who can act on behalf of all. A resale buyer should get the original agreement, all receipts, the builder's endorsement and a no dues letter, and confirm that no bank holds a lien over the unit for the earlier buyer's loan.

Stamp duty and registration in Delhi, Noida, Ghaziabad and Gurugram

For a RERA project, the agreement for sale must be registered at the Sub-Registrar's office for the area where the property is, with stamp duty paid under the state's stamp law. Duty is usually paid through e-stamp paper and the registration appointment booked online. In some states an agreement that gives possession is stamped as if it were a sale, so the amount depends on the terms; check the current schedule before the appointment.

In Delhi, the Indian Stamp Act as applicable to Delhi governs duty, and registration is done at the Sub-Registrar offices of the revenue districts. In Noida, Greater Noida and Ghaziabad, the Indian Stamp Act as amended for Uttar Pradesh applies, and registration is through the state's online registration system and the Sub-Registrar offices of Gautam Buddh Nagar and Ghaziabad. In Gurugram, Haryana's stamp provisions and the tehsil-level registration offices apply.

The conveyance deed after completion will attract stamp duty on the circle rate or the price, whichever is higher, in the state concerned, and the builder may have adjusted part of this in the agreement. Ask for a clear estimate of both stages, and make sure the agreement does not let the builder pass on penalties for its own delays in registration.

Checklist before you sign a builder buyer agreement

• Get the full draft with every schedule, annexure and the payment plan at least a week before registration.
• Check that the carpet area is stated and that balcony and terrace areas are shown separately.
• Confirm the possession date is a fixed date and matches the completion date on the RERA website.
• Check that delay interest is at the rate in the state rules and equal to the rate charged to you.
• Read the cancellation clause and calculate what you would lose if you had to exit.
• Check the parking clause, the list of common areas and the maintenance terms.
• Ask for the sanctioned plan, the specifications and disclosure of any mortgage on the project.
• Get the bank's tripartite agreement and loan terms if you are taking a home loan.
• Ask for an estimate of stamp duty and registration fees for the agreement and the conveyance deed.

Mistakes buyers make with builder agreements

• Signing at the registration office. Reading a 60 page agreement at the Sub-Registrar's counter is impossible. Ask for the draft in advance and refuse to register a document you have not read.
• Assuming the format cannot be changed. Builders do agree to correct dates, areas and interest rates, especially for clauses that conflict with RERA. Ask in writing and keep the reply.
• Ignoring the annexures. The payment plan, specifications and common area list are often in annexures that differ from the brochure. Check them as carefully as the main text.
• Signing addenda without advice. Supplementary agreements that change the possession date, the area or the payment plan midway can take away accrued rights such as delay interest. Get them reviewed before signing.
• Relying on brochure and sales promises. If the club, the view, the parking or a fixed price matters to you, it should be in the agreement. Section 12 of RERA helps with false advertisements, but proving the promise is easier when it is written in.
• Not keeping the registered copy safe. The registered agreement, receipts and correspondence are the evidence for any future claim. Keep originals in one file and scanned copies elsewhere.

After signing, related checks, cost and time

Once the agreement is registered, diarise the payment stages, the possession date and the grace period, and keep checking construction progress against the RERA quarterly updates. If the builder misses the date, your corrected agreement becomes the basis for a builder delay case or a RERA complaint. If you are at the earlier stage, see our page on allotment letter review.

A buyer agreement review is often paired with a title verification or chain of title check of the project land and an encumbrance check for mortgages. For the money side, see stamp duty advisory. At the end of the project, the steps are possession letter assistance and conveyance deed registration.

The cost of a review depends on the length of the agreement, the number of annexures and related documents, and whether a correction letter and follow-up with the builder are needed. Ask for the scope and fee in writing. With the complete draft, a review usually takes a few working days, so ask for the draft well before the registration appointment. If you want the papers checked before you act, the team of Advocate B.K. Singh at Legals365 can review them and tell you the next step through our talk to a lawyer page.

When an LLP is a party

A limited liability partnership under the LLP Act 2008 is a body corporate, separate from its partners, with perpetual succession. It owns property, signs contracts and sues in its own name, and a partner's liability is limited to the agreed contribution except in cases of fraud. Every LLP needs at least two designated partners, at least one of whom is resident in India, and the designated partners answer personally for its statutory compliance.

The LLP agreement is the governing document, much like a company's articles. It decides who can sign, how decisions are taken, which matters need the consent of all partners, and how partners join and leave. It must be filed with the Registrar of Companies, and so must every change to it. Each partner is an agent of the LLP for its business, so a third party dealing in good faith can usually hold the LLP to a partner's act. For sale deeds, loans and litigation, though, sub-registrars, banks and courts ask for a partners' resolution or authority letter naming the partner who signs. Check the LLP's master data on the MCA portal: LLPIN, status, designated partners and registered charges.

The difference from an ordinary firm under the Partnership Act 1932 is real. Partners of an LLP are not jointly liable for its debts, and one partner is not personally liable for another partner's wrongful act. That is why lenders and landlords commonly take personal guarantees from LLP partners. The difference from a company matters too: there is no oppression and mismanagement remedy before the NCLT, so partner disputes are settled under the LLP agreement, usually by arbitration, or by a civil suit, and in serious cases by winding up through the NCLT.

Every LLP files an annual statement of account and solvency and an annual return with the ROC. Late filings attract additional fees for each day of delay, and an LLP that has stopped doing business can be struck off. The 2021 amendment decriminalised many defaults, but filings in arrears still block loans, registrations and government contracts at the worst moment. The IBC applies to LLPs, so a creditor can start insolvency proceedings against an LLP that defaults above the threshold.

In practice: name the LLP exactly as registered, ending in LLP; attach the partners' resolution and a copy of the LLP agreement to any deed, lease or plaint; and if the LLP was converted from a firm or a private company, confirm that property held in the old name has been mutated. Conversion vests the assets in the LLP by law, but municipal records, development authorities and sub-registrars still need to be updated before the property can be sold or mortgaged smoothly.

Frequently asked questions

What is a builder buyer agreement?

It is the agreement for sale between a promoter and a buyer for a unit in a project, usually under construction. Under RERA it must be registered and follow the format in the state's RERA rules before the builder takes more than 10 percent of the price. Ownership passes later, by the registered conveyance deed.

Can I ask the builder to change the agreement?

Yes. Builders often agree to correct the carpet area, possession date, delay interest and parking, especially where the draft conflicts with RERA. Send the requested changes in writing before registration and keep the reply.

What clauses should I check first in a builder agreement?

Start with the payment plan, possession date and grace period, delay interest, cancellation and forfeiture, and carpet area. Then check parking, common areas, maintenance, force majeure and the dispute clause. The annexures often contain the most important terms.

Are one-sided clauses in a builder agreement binding?

Not always. The Supreme Court held in Pioneer Urban Land v Govindan Raghavan (2019) that one-sided clauses are an unfair trade practice and do not bind the buyer. Under RERA, terms that conflict with the Act or the state model agreement also do not prevail.

Is registration of the builder buyer agreement compulsory?

For a RERA project, yes: section 13 requires a registered agreement for sale before the builder takes more than 10 percent of the cost. It is registered at the Sub-Registrar's office with stamp duty under the state's law. Older pre-RERA agreements were often unregistered.

Can a builder sell open parking separately?

Open parking is part of the common areas under section 2(n) of RERA and generally cannot be sold separately. A covered parking space or garage can be allotted with the unit. The agreement should identify the parking allotted to you.

How much can a builder forfeit if I cancel?

Consumer commissions have generally treated about 10 percent of the price as the reasonable outer limit, and many state model agreements limit forfeiture to the booking amount. If the builder is in default, you can withdraw with a full refund and interest under section 18.

What is the defect liability period under RERA?

Five years from the date of possession under section 14(3). The builder must rectify structural or workmanship defects reported in that period within 30 days without charge, or pay compensation. A clause shortening this period should be corrected.

Does an arbitration clause stop me from going to RERA or consumer court?

No. An arbitration clause in a builder agreement does not take away the buyer's right to approach RERA or the consumer commission. Still, ask for it to be made optional so it cannot be used to delay matters.

Should an NRI sign the builder agreement through a power of attorney?

An NRI can sign and register through a properly executed power of attorney, attested or apostilled as required. Payments should go through permitted banking channels so refunds can be repatriated. Have the power of attorney checked before the registration appointment.

What should I check in a builder agreement for a plot or agricultural land?

For a plot, check the layout approval, dimensions and the builder's obligation to complete roads, sewer and power. For agricultural land, check change of land use, RERA registration and state restrictions on transfer. An agreement cannot make a prohibited transfer lawful.

How long does a builder buyer agreement review take?

Usually a few working days after the complete draft and annexures are received. Longer agreements, resale files and addenda take more time. Ask the builder for the draft well before the registration date.

Are LLP partners personally liable for its debts?

Generally no. The LLP pays its obligations from its own assets, and a partner is liable only to the extent of his contribution unless he gave a personal guarantee or acted fraudulently.

Can an LLP buy property in Delhi or Noida?

Yes. An LLP can buy, lease and mortgage property in its own name through an authorised partner. Leasehold authorities such as the DDA or the Noida Authority have their own transfer rules and charges, so check those before the deal.