Builders Agreement


Last Updated on 9 months by ChennaiRealties


Builders Agreement(BA) is the most important document covering all aspects of the transaction to buy an Apartment. So, it should be carefully studied before signing. A correctly worded BA will give no room for doubts. It will go a long way in a peaceful and happy enjoyment of the property in the future. The Approved Plan should form part of the BA. And the Construction Activity should start only after the plan is sanctioned by the Authorities

The Builder’s Agreement should contain the following essential details

The Carpet area, the Plinth area and the Super built up area The Carpet area as the name suggests is the area inside the flat. The Plinth area or the built-up area is the Area of the walls and balcony added to the Carpet area.  Super Built-up area is the sum total of Plinth Area plus all common areas. And the Common Areas are: the lobby, staircase, lift room, swimming pool, etc.  The Buyer is going to pay for the Super built-up area. Therefore, the BA should mention the Super Built-up area along with the break-up under each head.  


The area of the land, that is the Undivided Share of Land (UDS) associated with your flat. 


The BA should specify the quality of construction. It also should elaborate on the use of materials in Constructing the flat. 


The details of the the facilities promised by the Builder should contain in the BA. 

Price and Related Issues

The total value of the flat, the payment mode and the stages of payment should clearly mentioned in the BA. Also, the final handing over date. 

Provision for Compensation

Also the BA should state the Compensation or damages the Builder should pay. This is in the event of their inability to adhere to the schedule.  

Completion Certificate

The BA also should contain the Builders Undertaking to give the CMDA’s Completion Certificate.  

Original Documents

An undertaking to hand over all the original documents to the society once the Building is complete. This should be to the Association of flat owners. 

No due Certificate

The BA should contain a clause on the payment of all taxes and other dues to the governments. Also, the Builder should undertake to maintain the building until it’s handing over to the Association.  Extra Works Details of full details of any extra facilities/work. This is about billing for the extra works for which he charges. 

Car Parking

Various judgments lay down that the builder cannot sell the Car Parking area separately to any apartment. If the builder is charging separately for this facility that means they are increasing the overall rate.

Escalation Clause
Builders would try to include this clause in the BA as the prices of construction materials are fluctuating. It is better to resist including this clause. It depends upon your bargaining strength.

Taking Over

Ensure while taking over that the flat, that it is in order in all respects as per the agreement. At the initial stage itself, rectify violations if any. Also, record all pending disputes.

CMDA’s Guide

The CMDA’s advises the Buyers to take care of certain important points while buying a flat. We reproduce them below for the benefit of readers.

Points for Consideration while Buying a Flat

Save Your Hard Earned Money

Check whether the Promoter displays the details of approved plan on the site.

Ensure that the construction of the flat is as per the Approved Plan.

Check whether the Promoter/Power of Attorney has a right to transfer the Undivided Shares of land.

Verify whether the Land Owner/Promoter transfers the entire  Undivided Shares of land.

Ensure that the Land owner/promoter/Power of Attorney has no right over the open spaces.

Also ensure that the Promoter/Land Owner has no rights over the terrace after entire Undivided Shares of land has been transferred.

Check whether the Promoter get the Completion Certificate issued by the CMDA after the completion of the building.

If you have any further clarifications regarding the purchase of flat, kindly contact the counselling counter at CMDA.

Now, registration of Builders Agreement (Construction Agreement) is made compulsory in Tamilnadu. Click HERE for details .





One response to “BUILDER’S AGREEMENT”

  1. Umashankari avatar

    Is builder’s agreement applicable to apartments purchased at chennai before 2013. For an apartment purchased in 1988 there is no builder’s agreement . Is it ok? Who will provide this now?

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