The Push for a Uniform Model Agreement
Historically, the "Agreement for Sale" was a weapon used by builders to exploit homebuyers. Contracts were riddled with arbitrary, one-sided clauses that protected the developer from all liabilities while stripping buyers of their rights.
To combat this, Section 84 of the RERA Act required appropriate governments (States and UTs) to frame rules and notify a standard "Model Agreement for Sale". The Supreme Court of India has continuously emphasized the necessity of a uniform model agreement across the country to prevent builders from arm-twisting the general public.
Can a Builder Deviate from the Model Agreement?
While RERA mandates the use of the Model Agreement, real estate is a complex business, and some flexibility is legally permissible to accommodate project-specific requirements. However, a builder cannot execute an agreement that contradicts the core provisions of the RERA Act.
1. Void Ab Initio for Statutory Violations
If a builder inserts a clause that is inconsistent with the RERA Act or its associated rules, that specific clause is considered void ab initio (legally invalid from the very beginning). For example, if the RERA Act prescribes a 5-year defect liability period, a clause in the agreement limiting it to 1 year is entirely void.
2. The "Unfair Trade Practice" Test
What happens if a builder inserts a clause that isn't explicitly forbidden by RERA, but is highly oppressive to the buyer? Indian courts and tribunals have taken a firm stance on consumer welfare.
Even if a deviation technically bypasses the strict rulebook, courts have condemned agreements that simply tilt favorably towards the promoter. For instance, while 10% is the accepted benchmark for Earnest Money, if a builder deviates and includes a clause to forfeit 20% of the property value upon cancellation, courts have struck this down. Such ex facie one-sided and oppressive contractual terms constitute an "unfair trade practice," irrespective of whether the buyer signed the document.
What Should Homebuyers Do?
- Demand the Standard Format: Before signing, compare the builder's draft agreement with your state's official Model Agreement for Sale (usually available on the state RERA website).
- Scrutinize Added Clauses: Pay close attention to the schedules and annexures where builders often sneak in restrictive covenants, such as blanket permissions for future layout changes or waivers of common area rights.
- File a Complaint: If a builder refuses to alter a blatantly one-sided clause, you can file a complaint with the RERA Authority. Authorities have the power to direct the builder to rectify the agreement to align with the statutory model, or risk having their project registration revoked.