Agreement of Sale

10 Things to Check Before Signing

An Agreement of Sale (AOS) is an agreement signed on stamp paper between builder and buyer containing all key clauses agreed at the time of sale. RERA mandates execution of AOS for collecting more than 10% of the cost of the Apartment/Villa1.  

Apartment and Villa projects sometimes stretch over years from sale date to handover date. AOS is one of the key documents that can protect your rights during this time. Hence, it is important for you as a buyer to insist on execution of AOS and understand it completely before signing. 

While this article focuses on the Hyderabad real estate market, the contents are useful for buyers across the country. Always ask your builder to share the draft of AOS for review. Here are the key things you need to check before signing any AOS.:

1. AOS Format: TS RERA mandates a specific format for AOS2 (https://rera.telangana.gov.in/Uploads/FD_8.pdf). There should not be material differences between clauses in this format and the draft shared by your builder.

2. Basics first: Check for correctness of basic details like the builder name, your name, address, land area, survey numbers, apartment name, description, approval details, RERA registration number (match with the details available in RERA page of your project)

3. Legal title flow: The flow of title should be mentioned very clearly and should not have any title disputes, outstanding notices, or vague words like ‘to the best of our knowledge’. Common legal practice is to mention the title flow for at least the last 30 years.

4. Your unit details: Check for correctness of unit number, floor, tower, block, carpet area, exclusive area, common area, saleable area, and parking details

5. Price: The price should be accurate and clearly bifurcate into base price, floor rise charges, preferred location charges, amenities, maintenance, corpus fund, and taxes. There should not be any hidden charges or vague descriptions like ‘Other charges’. The booking amount already paid should be mentioned correctly.

6. Mode of payment: Account details to which further payments are to be made should be clearly mentioned and should be to the designated RERA account with account name capturing ‘project name’ and tag ‘Collection A/c’3. Strictly do not agree to transfer amounts to any accounts other than this designated account unless it's taxes that need to be paid directly to competent authority.

7. Possession timeline: Possession timeline should be in line with the promise made during sale and should be on or before the RERA project completion date.

8. Payment plan: Detailed payment plan that is agreed during sale should be captured correctly in the relevant annexure. The terms should be preferably linked to progress of the project and should not be too aggressive in favor of the builder. 

9. Payment default: In case you miss any payment as per the agreed payment plan, the builder has to give you sufficient time before charging interest or cancelling the unit. The timeline should be specifically captured in the agreement and should be reasonable.

10. Specifications of unit, amenities, and other facilities: All the promises made by the builder at the time of sale should be captured correctly.  A few common items are floor height, kind of tiles to be used in flooring, wall finishes, sanitary fittings, door material and dimensions, kitchen materials, list of amenities, security features, power backup, solar systems, fire safety, and anything else that is important to you as a buyer. 

References:

1. THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016

2. RULES - Telangana Real Estate (Regulation and Development) Rules, 2017- Notification – Orders – G.O.Ms.No.202.

3. Circular No. 1558/TG RERA/2024 Dt 09.09.2024

TS RERA Website: https://rera.telangana.gov.in/