Bombay HC: Builders Cannot Collect More Than 10% of Flat Price Without Registered Sale Agreement — RERA Section 13 Compliance Mandatory

Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

Date: 17.10.2026

Bombay HC: Builders Cannot Collect More Than 10% of Flat Price Without Registered Sale Agreement — RERA Section 13 Compliance Mandatory

The Bombay High Court has directed Rare Townships Pvt. Ltd. to execute and register a RERA-compliant agreement for sale within four weeks, while treating 4 October 2024 as a tentative possession date pending final determination by the Maharashtra Real Estate Appellate Tribunal.

Background of the dispute

The dispute concerns a residential flat in the developer’s Ghatkopar project, originally marketed as “Rising City” and later registered under RERA as “North Sea Heights (A-1).”

The buyers initially received a holding receipt in January 2011 for a different flat. The parties subsequently changed the unit, and a provisional allotment letter dated 30 November 2014 was issued for Flat No. 805 in Building A-1, with a stated consideration of Rs. 1.248 crore.

The parties ultimately agreed that the buyers had paid Rs. 38.47 lakh by 2016. Despite this payment, no registered agreement for sale was executed. The core disagreements included the unpaid balance, the agreement’s terms, the possession timeline, parking and amenities, and each side’s liability for delay.

RERA authority’s earlier directions

In July 2025, MahaRERA partly allowed the buyers’ complaint. It required the developer to execute a registered agreement for sale under Section 13 of the Real Estate (Regulation and Development) Act, 2016, based on the allotment letter.

MahaRERA also held that:

• The buyers would pay the outstanding consideration and any applicable interest for delayed payments under the statutory framework.
• The developer would pay interest for delayed possession from 4 October 2024 until it offered possession with an Occupation Certificate.
• The parties’ respective payment obligations could be adjusted and set off when possession was delivered.

The buyers appealed for a more complete RERA-compliant agreement, including parking, amenities, model-agreement protections and safeguards against payment demands or termination before registration.

Interim tribunal order and developer’s challenge

The Appellate Tribunal initially directed the developer to provide and execute a RERA-compliant agreement. It also restrained the developer from demanding further money or issuing termination notices until the agreement was executed and registered. A review order corrected the buyers’ payment figure to Rs. 38.47 lakh and corrected the allotment-letter date.

Rare Townships challenged the interim order in the High Court. Its principal objection was that the Tribunal had effectively decided disputed issues at an interim stage, particularly by requiring the agreement to state a possession date and by excluding interest for alleged payment delays before the agreement’s execution.

High Court’s reasoning

The Court emphasized that a registered agreement for sale is not optional once substantial sums have been accepted from a buyer. It noted that both the earlier Maharashtra Ownership Flats Act framework and RERA seek to prevent promoters from accepting significant advances without documenting the parties’ rights and obligations in a registered agreement.

Under Section 13 of RERA, a promoter cannot accept more than 10% of an apartment’s cost before entering into a registered written agreement for sale. The agreement must cover key matters, including project specifications, payment schedules, the possession date and default interest.

Here, the Court found that the developer had accepted more than 30% of the agreed consideration without executing the agreement. It therefore upheld the essential requirement to execute a registered, RERA-compliant agreement.

The Court drew a distinction, however, between requiring an agreement and conclusively determining the contractual possession date. The possession date remained an issue in the buyers’ pending appeal before the Appellate Tribunal. The High Court therefore modified the interim arrangement rather than treating that issue as finally settled.

Final directions

The Court disposed of the second appeal with these principal directions:

• Tentative possession date: The agreement must record 4 October 2024 as the possession date.
• No final determination: That date is tentative, without prejudice to either side, and remains subject to final adjudication by the Appellate Tribunal.
• Rectification if required: If the Tribunal changes the possession date, the parties’ rights and liabilities will follow that determination and they must execute a deed of rectification.
• RERA-compliant agreement: The agreement must comply with Section 13 of RERA and the prescribed model agreement under Maharashtra’s 2017 RERA Rules.
• Time limit: The developer must execute and register the agreement within four weeks of the judgment.
• Issues kept open: All remaining disputes, including payment, interest, parking, amenities, compensation and the final possession timeline, remain open before the Appellate Tribunal.

Why the decision matters

The ruling reinforces that developers cannot retain substantial buyer payments while postponing the registered agreement for sale. It also confirms that a RERA-compliant agreement must transparently state essential commercial terms, including payment obligations, possession and default consequences.

At the same time, the judgment preserves procedural fairness: an interim order can secure the statutory agreement and protect buyers from premature demands or termination, but contested issues such as the final possession date must remain available for full appellate adjudication.

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Source: Bombay High Court

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