Three documents, in order
Allotment letter
Issued after booking, confirming a unit has been set aside for you. The weakest of the three. It usually records the unit, the price and little else.
Agreement for sale
The contract. It sets out what is being sold, for how much, on what schedule, by when, to what specification, and what happens if either side fails. This is where your protections are.
Sale deed
The conveyance. Registered, stamped, and the instrument on which ownership actually passes to you. Normally executed around possession.
By the time the sale deed is drawn, the commercial terms have been fixed for years. The document whose terms you can still influence is the agreement for sale, and it is the one most often signed quickly in a sales office.
| Allotment letter | Agreement for sale | Sale deed | |
|---|---|---|---|
| Effect | Reserves a unit | Contract to transfer | Transfers ownership |
| Carries your protections | Rarely | Yes, this is where they live | No, terms are settled by then |
| Possession date stated | Often not | Required | Not applicable |
| Carpet area stated | Often not | Required | Yes |
| Stamp duty and registration | No | May apply | Yes, the main statutory moment |
| When to have a lawyer read it | Before paying | Before signing, always | Before execution |
What the agreement for sale does
- Identifies the unit precisely: tower, floor, number, and the carpet area.
- Fixes the consideration and the schedule on which it is payable.
- States the possession date, which is the date against which delay is measured.
- Sets the specification for what will be delivered.
- Defines the remedies on delay, on default and on cancellation.
- Records what is included: parking, and which charges sit inside or outside the price.
What it does not do is make you the owner. Until the sale deed is registered, you hold contractual rights against the seller, not title to the property.
What the sale deed does
The sale deed transfers ownership. It is executed by the seller, stamped, and registered at the sub registrar's office, and it is the document that will appear in the encumbrance certificate of every future buyer.
Three practical points:
- Stamp duty and registration fall due here, which makes this the largest statutory moment of the purchase. How that is computed is worth knowing in advance.
- Lenders usually want the registered deed before or at final disbursement, so the sequencing of registration, disbursement and possession needs to be understood early.
- Check it matches the agreement. Unit, carpet area, parking, consideration. A discrepancy between the two documents at this stage is a problem to resolve before signing, not after.
Why RERA made the agreement central
The Real Estate (Regulation and Development) Act, 2016 shifted weight onto the agreement for sale deliberately. A promoter is required to execute a written agreement for sale and register it before accepting more than the prescribed share of the cost of the apartment, and the agreement must carry specific content.
What that gives you:
- Carpet area as the basis of sale, stated in the agreement. This is why knowing which area basis you were quoted matters, and why the agreement is where you check it.
- A stated possession date, which is the reference point for any delay claim.
- A defined payment schedule, rather than demands at the developer's discretion.
- A limit on how much can be collected before the agreement is executed, which is the protection most often given away by buyers who pay large sums on an allotment letter.
Want to see the draft agreement before you commit?
Ask for the draft agreement for sale, the payment schedule and the specification sheet early, so your lawyer can read them before anything substantial is paid.
The clauses to read closely
- Carpet area. Stated, and matching what you were shown. Check the balcony area separately.
- Possession date. A specific date, and the same date as on the RERA registration. If the two differ, ask why before signing.
- Payment schedule. Amounts and triggers. Note whether triggers are documents issued by an authority or events the developer declares.
- Delay clause. What you receive if possession is late, how it is calculated, and from when.
- Your default clause. What happens if you are late, and compare the two. Asymmetry here is common and is worth raising.
- Cancellation and forfeiture. What you get back and what you lose. This deserves its own reading.
- Specification. Annexed and specific, not described in adjectives.
- Charges outside the price. Listed, so nothing arrives unannounced at possession.
- Alterations clause. What the developer may change without your consent.
- Dispute resolution. Where disputes go, and whether that preserves your access to the authority.
What to ask
- May I have the draft agreement for sale before paying anything beyond the booking amount?
- Does the possession date in the agreement match the one on the RERA registration?
- Is the carpet area stated, and does it match what I was quoted?
- What are the delay remedies, and how do they compare with my default terms?
- When will the sale deed be executed and registered?
- What does my lender need, and at which stage?
- Has my property lawyer read this before I sign it?
Question one is the one that matters. A developer willing to share the draft early is telling you something, and so is one who is not.
This is a general explanation written for buyers. It is not legal advice, procedures and rules change, and your position turns on your specific documents. Engage a property lawyer with local experience before you sign anything.
What is the difference between an agreement to sale and a sale deed?
An agreement for sale is a contract under which the seller promises to transfer the property to the buyer on agreed terms at a future date. A sale deed is the conveyance that effects the transfer. Ownership passes on the registered sale deed; the agreement creates enforceable rights and obligations but does not itself transfer title.
Is an agreement for sale legally binding?
Yes, it is a contract and creates enforceable rights and obligations between the parties. What it does not do is transfer ownership. It is the document under which you can require performance of the promise, which is why its terms deserve close reading before you sign rather than after.
Does an agreement for sale need to be registered?
Requirements vary by state and by the nature of the document, and stamp duty may be payable on it. Under RERA a promoter is required to execute a written agreement for sale and register it before accepting more than the prescribed share of the cost. Confirm the requirement for your specific transaction with a property lawyer.
What is an allotment letter?
A document issued by a developer confirming that a particular unit has been allotted to you, usually after the booking amount is paid. It is weaker than an agreement for sale and typically sets out far less. Do not treat it as the contract, and do not pay substantial sums on the strength of it alone.
Which document do I need for a home loan?
Lenders normally want the agreement for sale during the construction period, since that is what evidences your purchase and the payment schedule, and the registered sale deed before or at final disbursement. Ask your lender exactly which documents are needed at which stage, because the sequence can affect your cash flow.
When should I have a lawyer read the agreement?
Before you sign it, and before you pay anything beyond a token booking amount. The agreement is where the delay remedies, specification, cancellation terms and payment triggers are set. Once it is signed those terms are settled, and reviewing it at registration is far too late to change anything.