Paid 65% on an MoU, No Agreement Signed: RERA Orders the Builder to Register One and Pay Interest

On 18 September 2021, a company was allotted four commercial units totalling 836 sq ft in a commercial project in Sector 85, Gurugram. The price was Rs 1,15,92,812. A memorandum of understanding followed on 27 May 2022, promising possession in December 2023 with a six-month grace period. By the time the buyer complained, it had paid Rs 75,00,000, roughly 65% of the price. What it did not have was a registered agreement for sale. The builder had never signed one.

On 13 October 2026, the Haryana Real Estate Regulatory Authority at Gurugram called that "violation of the provisions of the Act" that "shows its unlawful conduct". Citing Section 13(1) of the RERA Act, it ordered the promoter to execute a registered agreement within 60 days, and to pay interest at 10.80% per annum for every month of delay from 30 June 2024. Bengaluru buyers who have paid well past the booking stage on an allotment letter or MoU alone should note how the Authority treated the missing agreement.

The short answer. In Complaint No. 3129 of 2025, Haryana RERA held that the promoter, having taken Rs 75 lakh on a Rs 1.16 crore unit without a written and registered agreement for sale, had violated the Act, because Section 13(1) bars a promoter from accepting more than 10% of the cost as an advance without one. It directed a registered agreement within 60 days, delay interest at SBI MCLR plus 2% (10.80%) from 30 June 2024, arrears within 90 days, and no charges outside the MoU. The trade-off: the buyer got its agreement and interest, but its claim to a Rs 4,24,528 GST waiver was declined.

What happened in the Park Street, Sector 85 case?

According to the Haryana RERA order in Complaint No. 3129 of 2025, the project is "Park Street", formerly known as "85 Avenue", a 2.85-acre commercial project in Sector 85, Gurugram, registered with Haryana RERA. The complainant was allotted units G-44A, G045, G-45-A and G-45B on 18 September 2021 and signed an MoU on 27 May 2022. The order's project table records the agreement for sale as "not executed".

Clause 6.17 of the MoU said possession "will be Dec 2023 subject to force majeure and with an additional grace of 6 months". The Authority allowed the grace period because it was "unqualified", and fixed the due date at 30 June 2024. It found that possession had not been offered by the date of the order, and that nothing on record showed whether the builder had applied for an occupation or completion certificate.

What does Section 13(1) say about payments before an agreement?

The Authority set it out directly: "As per Section 13(1) of the Act, 2016, the promoter is obligated to not to accept more than 10% of the cost of the apartment, plot or building as the case may be, as an advance from a person without entering into a written agreement for sale with such person and register the said agreement for sale." It observed that "despite receipt of considerable amount against the booked unit back in 2021", the promoter had failed to sign and register an agreement, and called this "violation of the provisions of the Act" showing "unlawful conduct".

Our earlier explainer on the Section 13 ten per cent cap and the agreement for sale covers the rule itself. This order shows one remedy: the Authority directed the promoter to enter into a registered agreement "as per the 'agreement for sale' annexed with the Haryana Real Estate (Regulation and Development) Rules, 2017", within 60 days of the order.

How was the delay interest worked out?

The Authority applied Rule 15 of the Haryana rules, under which the prescribed rate is SBI's highest marginal cost of lending rate plus 2%. It recorded that SBI's MCLR "as on date i.e., 13.10.2026 is 8.80%", making the prescribed rate 10.80%. Interest is payable on the paid-up amount for every month of delay from 30 June 2024 until a valid offer of possession plus two months after the occupation or completion certificate, or actual handover, whichever is earlier.

Arrears from 30 June 2024 to the date of the order must be paid within 90 days, and interest after that must be paid by the 10th of each following month. The Authority also noted that under Section 2(za), the rate a promoter can charge an allottee for default is the same 10.80% it must pay for delay.

Two further observations in the order matter for buyers waiting on an unfinished project. First, because nothing on record showed an application for an occupation or completion certificate, or the stage of construction, the Authority said the project "is to be treated as on-going project" and the provisions of the Act "shall be applicable equally to the promoter as well as allottees". Second, on conveyance, it noted the promoter's duty under Sections 11(4)(f) and 17(1) and the allottee's matching duty under Section 19(11) to participate in registering the conveyance deed. It said the promoter is liable to hand over possession and execute the conveyance deed on payment of stamp duty and registration charges, within three months after obtaining the occupation or completion certificate.

Why was the GST waiver claim declined?

The buyer relied on Clause 1.4 of the MoU, which described Rs 75 lakh as including net GST "after GST benefit provided of Rs. 4,24,528", and challenged demand letters dated 13 February 2025 and 27 February 2025. The Authority pointed to Clause 4.1, under which "all taxes, whether service tax/G.S.T, property, statutory or municipal... shall be the sole responsibility of the allottee", and noted that the due date fell after GST came into force. It held the builder was entitled to charge GST and declined the waiver.

It added that the buyer "is well within its right to obtain bifurcation/justification" of the GST charged and proof of payment to the departments. For buyers who negotiate a headline GST discount, the lesson is to check that the tax clause elsewhere in the same document does not take it back. The order also directed the builder not to charge anything outside the MoU, to hand over possession under the MoU and to execute the conveyance deed under Section 17(1).

What should a Bengaluru buyer check before paying beyond 10%?

Allotment letters and MoUs can carry a deal a long way before a registered agreement appears, as this case shows. Our guide to the first 30 days after booking a flat sets out the early steps. Before any payment that takes you past 10% of the price, run through this list.

1. Work out 10% of the total cost of the flat as stated in your allotment letter or quotation.
2. Add up every amount you have paid so far, including any booking or application amount.
3. Before paying beyond 10%, ask for the draft agreement for sale and a date for registration.
4. Check that the agreement follows the model form annexed to your state's RERA rules.
5. Read the possession clause for the date, any grace period and whether the grace is conditional.
6. Read the tax clause alongside any discount or "benefit" promised on GST or other charges.
7. If the builder keeps taking payments without registering an agreement, raise it in writing and consider a complaint.

Does this Haryana order apply to Karnataka projects?

It is an order of the Haryana RERA Authority on a Gurugram commercial project, so Bengaluru buyers should read it as an example rather than a Karnataka ruling. The interest rate and the model agreement come from Haryana's rules. But Section 13(1) is part of the central RERA Act and reads the same in Karnataka, and the order shows how one authority enforced it after the fact.

The safer course is not to need such an order at all. Insisting on a registered agreement before paying past 10% keeps your rights in writing from the start, and makes any later claim for delay simpler to prove. Our explainer on pre-launch cheques and registration first covers the stage before booking.

Frequently asked questions

Can a builder take more than 10% without a registered agreement for sale?

Haryana RERA's 13 October 2026 order states that under Section 13(1) of the RERA Act, a promoter is obligated not to accept more than 10% of the cost as an advance without entering into a written agreement for sale and registering it. It called taking Rs 75 lakh without one a violation.

What did Haryana RERA order in the Park Street case?

It directed the promoter to execute a registered agreement in the model form within 60 days, pay delay interest at 10.80% per annum from 30 June 2024 until valid possession, pay arrears within 90 days, hand over possession, execute the conveyance deed and charge nothing outside the MoU.

How was the 10.80% interest rate calculated?

Under Rule 15 of the Haryana RERA rules, the prescribed rate is SBI's highest marginal cost of lending rate plus 2%. The order recorded SBI's MCLR as 8.80% on 13 October 2026, giving a rate of 10.80% per annum for delay interest and for any default by the buyer.

Did the buyer get the GST waiver promised in the MoU?

No. The Authority relied on a clause making all taxes the allottee's responsibility and noted that the due date fell after GST came into force, so it declined the Rs 4,24,528 waiver claim. It said the buyer may ask for a breakup of GST charged and proof of payment.

Last updated 2026-11-15. PropNewz Team.