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Reading a Plot Buyer Agreement: Clause by Clause (2026)
What to look for in an agreement for sale of a plot, how RERA changes the terms for registered projects, and the clauses that most often hurt buyers.
A plot buyer agreement (plot kharid samjhauta) is the document that decides what happens if the developer is late, the plan changes or you want out. Read it before you pay the token. This guide goes clause by clause, uses the MoHUA FAQ on the RERA Act for the points we could confirm, and flags the questions to put to a lawyer. It is general information, not legal advice.
Which document are you reading?
Booking forms, allotment letters, agreements for sale and sale deeds are different documents with different effects. Only a registered sale deed transfers ownership. An agreement to sell is a promise. Read agreement to sell versus sale deed and the sale deed guide first.
In a RERA-registered project, the MoHUA FAQ Q51 says the Agreement for Sale is a form to be specified by the State through Rules, that it is binding on both parties, and that its terms cannot be contrary to the Act and Rules. We could not confirm each State's prescribed form. Ask the developer whether the agreement follows the State format, and compare. If the project is not registered, none of this protection may apply. See how to check RERA registration.
The clauses that matter
| Clause | What to check |
|---|---|
| Parties | Names match the seller in the land record and, for a developer, the promoter on the RERA page |
| Land description | Village, khasra numbers, boundaries, area and unit; matches the record and the site |
| Price and what it includes | Price per unit, total, development charges, taxes, extra charges |
| Payment schedule | Linked to stages, not to dates; advance within the limit below |
| Possession date | A clear date and what counts as possession |
| Delay | Interest payable by the developer |
| Cancellation | Your right to withdraw and refund; forfeiture terms |
| Title and approvals | Promise of clean title; list of approvals; encumbrances |
| Plan changes | Consent needed for changes |
| Defects and services | Liability for defects; roads, water, power |
| Transfer | Your right to resell |
| Disputes | Forum and law; RERA complaint right |
Money terms
FAQ Q50 says a promoter cannot accept more than 10% of the plot cost as an advance payment without first executing an Agreement for Sale. If the developer asks for more on a booking form, ask for the agreement first. Q36 says seventy percent of the money received must go to a separate project account. Pay only to the account named in the agreement and shown on the RERA page. Keep every receipt and bank record.
Read the price clause for add-ons: club, maintenance, road, lighting, legal fees, registration costs. If the price excludes stamp duty and registration, say so. See stamp duty and registration charges by State. If a clause lets the developer forfeit your money on cancellation, read it twice. A 2020 Gujarat advance ruling treated a forfeited advance on a land sale as a taxable service for that applicant, so ask about tax too; see GST on land and plots. Tax rules change; check the current year.
Delay and withdrawal
FAQ Q57 and Q58 say a buyer in a registered project can withdraw and claim a full refund with interest and compensation, or stay and receive monthly interest for the delay. Q8 says the interest rate is set in State rules and is the same whether the promoter or the buyer defaults. We could not confirm the rate in each State, so read the clause and compare it with the State rule. A clause where the developer pays a lower rate than you pay on a late instalment is a red flag.
Also check the definition of delay. Vague phrases such as "subject to force majeure" can swallow the promise. FAQ Q42 allows extension of registration of up to one year in force majeure or reasonable circumstances, so ask the developer how the agreement defines such events.
Plan changes and defects
FAQ Q52 says the promoter cannot make major changes to sanctioned plans or specifications without approval of two-thirds of buyers, with one vote per buyer, while minor changes need the competent authority's approval and disclosure. An agreement that gives the developer a free hand to change layouts, plot sizes or facilities is out of line with that. Ask for the sanctioned layout and compare it with the plot map attached.
FAQ Q53 says the promoter is liable for structural defects for five years from handing over possession and must rectify them within 30 days. For a bare plot this may matter less, but it applies to infrastructure the developer builds. Check whether the agreement narrows it.
Title, approvals and land use
- Ask for the title documents and read them yourself. See chain of title and how to verify land title.
- Check the land record and encumbrance. See the encumbrance certificate guide.
- Ask whether the land use is agricultural or converted. See change of land use in India.
- Ask for the layout approval and the RERA number.
- Check for a power of attorney in the chain. See GPA land sale risks.
The agreement is only as good as the title behind it
A well-drafted agreement from a seller who does not own the land protects nothing. Check title first, then the clauses.
Red flags in the wording
- The agreement is not given until after you pay a large sum.
- No khasra numbers, or a plot number that cannot be matched to the record.
- No possession date, or a date that depends on the developer's sole decision.
- The developer may change the layout at its discretion.
- Forfeiture of all money on any cancellation, including the developer's own delay.
- A clause that says you accept the plot "as is" without a map.
- A clause that bars you from going to RERA or court. Q63 gives a buyer the right to complain to the Authority.
- A resale plot where the seller cannot show the developer's transfer permission. See resale plots explained.
How to review before signing
- Ask for the full draft and all annexures a week before signing.
- Read it with the checklist above.
- Compare it with the RERA page and the State format.
- Mark every clause you do not understand.
- Ask a lawyer to review the draft in writing.
- Request changes in writing and keep the replies.
- Register the document where required. See the Registration Act 1908 explained and the land registration process.
- Use the booking checklist before you pay.
What is unconfirmed
We could not open the RERA Act on India Code and relied on the MoHUA FAQ of July 2025 for the provisions cited. We could not open any State's prescribed Agreement for Sale form, State interest rates, the Indian Contract Act or the Transfer of Property Act for this page. We could not confirm whether an agreement for a plot outside RERA carries the same protections. Take written legal advice on any draft.
