RiteAssetz Lending Guides
Agreement for Sale Under RERA and Home Loans: What Buyers Should Verify Before Paying
Understand the RERA agreement for sale, the 10% advance rule, clauses buyers should verify and how the agreement fits into home-loan processing.
Quick answer
For a real-estate project covered by RERA, Section 13 of the Real Estate (Regulation and Development) Act, 2016 says a promoter must not accept more than 10% of the cost of the apartment, plot or building as an advance or application fee without first entering into a written agreement for sale and registering that agreement under applicable law. For a home-loan buyer, this agreement is a major transaction document, but it is not a substitute for lender legal and technical approval.
What the RERA agreement for sale does
The agreement records the contractual terms between promoter and allottee. Section 13 says it should specify particulars of development, construction specifications, internal and external development works, payment schedule, possession date and interest payable by promoter and allottee in case of default, among other prescribed matters.
The 10% advance rule
The central RERA Act's rule is often misunderstood. It does not say a buyer can safely pay 10% to any project. It says a promoter cannot accept more than 10% without first entering into and registering the written agreement for sale. Buyers should separately verify the project's RERA status, promoter details, approvals, title and lender acceptability.
Agreement for sale vs sale deed
| Document | Typical role |
|---|---|
| Agreement for sale | Records the parties' contractual promise, payment milestones, specifications and possession-related terms. |
| Sale/conveyance deed | Operative transfer document used to convey ownership in accordance with applicable law. |
The two should not be treated as interchangeable. A buyer may sign an agreement during construction and receive the final conveyance later after contractual and legal conditions are met.
What a home-loan buyer should verify
- Names of buyer, co-buyer and promoter match KYC and loan records.
- Unit number, carpet area, parking treatment and property description are consistent with project records.
- Total consideration and payment schedule are clear.
- Possession timeline and delay/default clauses are stated.
- Project registration and promoter details match the relevant RERA portal.
- Clauses do not conflict with the lender's disbursement requirements.
- Any tripartite or lender-specific documentation is understood before execution.
How it fits into loan processing
A lender may use the agreement to understand consideration, borrower obligation, unit details and payment milestones. It can also be relevant to disbursement scheduling. But sanction to the borrower and acceptance of the property remain separate decisions. The lender may independently review project approvals, title, construction stage and valuation.
Do not confuse bank project approval with buyer due diligence
Even if a project has been financed or previously accepted by a lender, a buyer should still conduct independent checks. Lender policies can change, unit-specific issues can exist and project-level comfort does not guarantee an individual borrower's sanction.
Before paying a large amount
- Verify the project on the applicable state RERA portal.
- Read the draft agreement rather than relying on a booking form or brochure.
- Check the 10% threshold and registration requirement under Section 13.
- Confirm the exact unit, consideration and milestone schedule.
- Understand cancellation, refund, delay and default clauses.
- Get legal advice where the transaction is complex or wording is unclear.
- Coordinate lender approval and disbursement timing before committing funds you cannot recover easily.
Related RiteAssetz guides
Continue with our guides on checking RERA approval, agreement to sell vs sale deed, tripartite agreements and property legal verification.
FAQ
Can a promoter take more than 10% before the agreement for sale?
Section 13 of the central RERA Act says no promoter shall accept more than 10% of the cost as advance or application fee without first entering into a written agreement for sale and registering it under applicable law.
Does signing the agreement guarantee a home loan?
No. The lender still assesses borrower eligibility and the property/project under its own credit, legal and technical policies.
Should I rely only on the builder's standard draft?
Read the actual terms and compare them with applicable RERA requirements and the project details. Obtain professional advice where necessary.
RiteAssetz takeaway: align the agreement, project verification and lender process before major payments. A clean transaction file reduces avoidable surprises during sanction and disbursement.