The recent decision by the Uttar Pradesh Government to require the registration of builder-buyer agreements upon the payment of 10% of the flat’s price has raised considerable apprehension among both buyers and developers. Homebuyers are obligated to pay a percentage of the property’s value as stamp duty to ensure its registration in government records. Additionally, they must incur a registration charge of 1% of the property value to finalize the documentation in Noida and Greater Noida.
This policy diverges from practices observed in other states, where the sale agreement generally entails a minimal stamp paper fee ranging from Rs 1,000 to Rs 10,000. At present, buyers and builders establish an initial agreement on a Rs 100 stamp paper, with the Authority becoming involved only after the developer secures an Occupancy Eertificate and a Completion Certificate for the project.
Industry experts suggest that this initiative is designed to protect flat buyers and improve revenue generation through stamp duty. The tripartite agreement will encompass property specifics, the total cost, payment conditions, and the date of possession. Nevertheless, industry leaders highlight the potential ramifications of this mandate, detailing its impact on both homebuyers and the wider real estate sector.
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Manoj Gaur, CMD of Gaurs Group and Chairman of CREDAI National, says, “This would not be a favourable practice as it imposes an unnecessary financial burden on buyers who already have to arrange a significant amount at the time of booking. In other states, the sale agreement is processed on a nominal stamp paper valued between Rs 1,000 and Rs 10,000, which is not the case here. The proposed 1% non-refundable registration fee that is part of the provision is also a direct loss for buyers. The lack of clarity on the refund policy in case of cancellation adds to the unease. 6% of the builder-buyer cost in stamp duty at the agreement signing stage is a big amount.”
Typically, 15-20% of bookings in any project are cancelled due to various reasons, which is also mandated by RERA. However, “The new regulation will significantly impact the financial situation of buyers who wish to cancel their bookings, as they are already facing unexpected challenges. The sector is of the view that the present provision would significantly deter the sector in Noida,
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