Know what is a Builder's Agreement - BA


Builder’s Agreement (BA) is the Agreement the Buyer of a Flat signs with the Builder or Promoter to sell the flat to him. It is the most important document covering all aspects of the transaction and should be carefully studied before signing. A correctly worded BA will give no room for doubts and go a long way in peaceful and happy enjoyment of the property in future.

No construction activity could commence without the plan being approved by the concerned authorities and the Approved Plan should form part of the BA.

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. When common areas like lobby, staircase, lift room, swimming pool etc are added, it becomes Super Built up area. You aregoing to pay for the Super built up area and therefore it must be clearly mentioned in the agreement along with the breakup under each head. The area of the undivided land ie, The Undivided Share of Land (UDS) that is associated with your flat. All specifications facilities that are agreed to be provided to the flats

The common facilities that are offered in the complex

Car parking facility. It is laid down in various judgments 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 th BA as the prices of construction materials are fluctuating. It is better to resist to including this clause. It depends upon your bargaining strength. Total value of the flat, Payment mode and the stages of payment. The final hand over date, Compensation or damages the Builder should pay in the event of their inability to adhere to schedule. Undertaking from the Builder to provide the Completion Certificate from CMDA as and when the building is complete as per plan
Undertaking to hand over all the original documents to the society once the Building is complete and the Association of flat owners was formed.

Clause relating to the payment of all taxes and other dues to the governments and maintaining the building by the Builder till it is handed over to the Association.
Full details of any additional facilities/work that the builder has agreed to provide in your apartment for which you have been charged extra.

Ensure while taking over that the flat that it is in order in all respects as per the agreement. Any violation should be rectified at the initial stage itself. If, however, any dispute is there then it must be recorded it at the earliest.


Page 33 of my Book
Chennai Real Estate Guide - Balamurugan
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