A builder demanding extra charges at possession can collect only what your registered agreement for sale provides. Section 19(6) of the Real Estate (Regulation and Development) Act, 2016 makes the allottee responsible for payments "in the manner and within the time as specified in the said agreement for sale", and Section 89 gives the Act effect over anything inconsistent in the contract. Escalation, an "increase in super built-up area", a club fee, a maintenance corpus, legal charges or a tax on an item never priced are owed only if the agreement priced them. The rest you may refuse in writing and still take the keys.
Part of the RERA and homebuyer disputes practice at S Jain & Attorneys, Bangalore.
This page is for the buyer whose flat is ready and whose possession letter carries a demand schedule. A late project is covered in builder delay and homebuyer remedies, and the car park in whether the builder can charge separately for parking.
| The demand | Owed only if | Act and model agreement | What to do |
|---|---|---|---|
| Escalation in the price | The agreement names the head and an order backs it | Clause 1.3: escalation-free save a development charge levied by the competent authority, notification enclosed | Ask for the notification. None, no payment |
| "Increase in super built-up area" | Measured carpet area under Section 2(k) exceeds the agreed figure | Clause 1.7: recalculated on carpet area at the agreed rate, capped at three percent | Ask for the measurement. Pay only the difference |
| Club membership fee | The price break-up lists it separately | Clause 1.2: the price includes all amenities. Section 12: compensation for a false advertisement | Refuse if the clubhouse is an amenity in the schedule |
| Maintenance corpus or deposit | The agreement fixes the sum and the date | Clause 11: maintenance till the association takes over is in the price. Clause 7.2: charges start after possession | Pay the agreed sum at possession, receipt marked deposit |
| Legal or documentation charges | The agreement lists them with an amount | Section 19(6): your share of registration charges. Stamp duty and the fee go to the State | Pay the State at registration. Refuse the rest |
| Infrastructure or development charges | A competent authority raised them before the declared completion date | Clause 1.3: later instalments only, order enclosed, never after the completion date | Check the order date against the project page |
| GST on a charge never priced | The underlying charge is itself owed | Clause 1.2: taxes are in the price, notification disclosed, no increase after the completion date | No charge, no tax |
| No-dues and no-claims declaration | Never as a condition of the keys | Sections 14(3), 18(3) and 19 are statutory and Section 89 overrides the contract. Pioneer Urban: a term signed without a choice is not binding | Sign a possession acknowledgement with a snag list. Strike the no-claims sentence |
Builder demanding extra charges at possession: which ones must I pay?
You pay the sums the registered agreement fixes, on the dates it fixes, and nothing that appears for the first time in the possession letter. Section 19(6) makes every allottee "responsible to make necessary payments in the manner and within the time as specified in the said agreement for sale", plus his share of registration charges, taxes, maintenance charges "and other charges, if any".
Builders read "other charges, if any" as a blank cheque. It is not. The proforma agreement for sale published on the K-RERA portal, the form that condition (a) of Form C of the Karnataka Real Estate (Regulation and Development) Rules, 2017 obliges every registered promoter to follow as Annexure A, says what those words mean. Clause 1.2 states the total price on carpet area and tells the promoter to "give break up and description", and the closing note bars any added term that derogates from the Act or the Rules. Find each line in the break-up. If it is there, it is owed. If not, the promoter is asking for a gift.
Key takeaway. The possession letter is not a contract. Section 19(6) ties your payment obligation to the registered agreement for sale, and Section 89 gives the Act effect over any demand that conflicts with it. A charge outside the price break-up is a request, not a debt.
Can the builder charge escalation or an "increase in super built-up area" after the agreement?
Not unless the agreement allows it in a specific and verifiable way, and the model agreement allows two things only. The first is clause 1.3: the total price is escalation-free save an increase in development charges payable to the competent authority, and even then the promoter "shall enclose the said notification/order/rule/regulation to that effect along with the demand letter", on later payments only, and never after the completion date.
The second is clause 1.7. After the occupancy certificate the promoter confirms the final carpet area, the price is recalculated at the rate per square foot agreed in clause 1.2, a reduction is refunded within sixty days with interest at the Rules rate, and an increase "which is not more than three percent of the carpet area of the apartment" may be demanded at the next milestone. Carpet area means Section 2(k): net usable floor area including internal partition walls and excluding external walls, shafts, balconies and exclusive terraces. Rule 4(3) makes even a project that was ongoing when the Act commenced disclose size on carpet area. Section 14(2)(i) forbids any alteration to your apartment's sanctioned plan without your consent, and its Explanation says a "minor" change never includes "an addition to the area". A smaller flat is dealt with in a flat delivered smaller than the agreed carpet area.
Three numbers settle an area demand.
Carpet area only
Section 2(k) counts net usable floor area with internal partition walls and leaves out external walls, shafts, balconies and exclusive terraces. Super built-up is not a statutory measure.
Three percent ceiling
Clause 1.7 of the model agreement lets the promoter demand an increase of not more than three percent of the agreed carpet area, at the agreed rate per square foot.
Escalation-free price
Clause 1.3 keeps the total price escalation-free except a development charge levied by the competent authority, with the order enclosed and only on later instalments.
What about the maintenance deposit, corpus fund and club membership?
The price break-up decides each of them, and maintenance money is a possession-stage payment. Clause 11 of the model agreement makes the promoter run essential services until the association takes over and records that "the cost of such maintenance has been included in the Total Price", and clause 7.2 makes the allottee liable for maintenance charges only "after taking the possession".
The Karnataka Real Estate Appellate Tribunal applied that rule in Appeal (K-REAT) 104 of 2020, decided on 23 April 2021 by K P Dinesh, Judicial Member, and P S Somashekar, Administrative Member, in an appeal against Total Environment Building Systems (After the Rain), where a maintenance deposit had been collected in March 2015, years before possession. The Tribunal held that a "maintenance deposit shall be collected only after taking possession of the premises", refused a refund because the agreement made the fund non-refundable and the allottee was staying in the project, and directed interest at nine percent a year on the deposit from payment until actual possession. A corpus demanded at possession in the agreed sum is owed, so the fight is about the receipt: it must name the sum a deposit held for the association, which Section 17(2) requires the promoter to hand over with the documents.
A club membership fee is different in kind. Clause 1.2 says the total price includes the cost of "all other facilities, amenities and specifications to be provided within the Apartment and the Project". Where the clubhouse is in the amenities schedule, a separate "membership" is the same thing sold twice. Where the promise was only in the brochure, Section 12 entitles a buyer who suffers loss "by reason of any incorrect, false statement" in an advertisement or prospectus to compensation.
Common mistake. Paying a maintenance corpus against the demand letter alone, with no receipt naming it a deposit held for the association. The money then sits in the promoter's revenue account and proving years later that it was a deposit becomes your problem.
Can they add GST, "legal charges" or "infrastructure charges" that are not in the agreement?
A tax follows the charge it sits on, so a charge the agreement does not support carries no tax. Clause 1.2 handles tax in three sentences: the total price "includes Taxes", meaning the goods and services tax or any similar levy on the construction, a change in the tax adjusts the amount, and an increase after the scheduled completion date "shall not be charged from the allottee". The same clause makes the promoter give you the details of the tax "along with the acts/rules/notifications together with dates", so the answer to a tax line is a request for the invoice and the notification.
Section 19(6) makes you pay your share of registration charges, and stamp duty and the registration fee go to the State at the sub-registrar's office. A lump sum styled "legal and documentation charges" payable to the promoter for a deed he is bound by Section 17(1) to execute is owed only if clause 1.2 lists it with an amount. "Infrastructure charges" go back to clause 1.3: a development charge raised by the competent authority may be passed on, order enclosed, on later instalments, and never after the completion date shown on the project page.
They will not give the keys unless I sign a no-dues letter: what do I do?
Take possession, sign an acknowledgement that possession was handed over on that date, and refuse the no-claims sentence, because the rights it is meant to extinguish are statutory and cannot be signed away. Section 19(10) requires every allottee to take physical possession within two months of the occupancy certificate, and clause 7.3 of the model agreement makes an allottee who does not take possession liable for maintenance charges anyway.
Three provisions survive any letter you sign. Section 14(3) gives you five years from possession to notify a defect, which the promoter must rectify "without further charge, within thirty days", and the proviso to Section 11(4)(a) keeps that duty alive after conveyance. Section 18(3) makes him compensate you for any breach of "the terms and conditions of the agreement for sale". Section 89 gives both effect over anything inconsistent in any other law. The Supreme Court in Pioneer Urban Land and Infrastructure Ltd v Govindan Raghavan, decided on 2 April 2019, held: "A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder."
The practical instrument is a protest letter dated the same day, listing each disputed charge, stating that it is paid solely to obtain possession and under protest, and reserving the complaint under Section 31. Pay what the agreement genuinely fixes, on time, because Section 19(7) charges interest on a late payment of any amount due under Section 19(6), at the Rule 16 rate. The sentence to strike and the snag list to annex are in registering before the amenities are finished, and the certificate to see first is in a Bangalore buyer's remedies without an occupancy certificate.
Deadline warning. Section 19(10) gives you two months from the occupancy certificate to take physical possession, and clause 7.3 of the model agreement makes maintenance charges run against you after that whether or not you have the keys. Dispute in writing, take possession inside the window.
How do I claim back what I paid under protest?
File a complaint with K-RERA under Section 31 in Form N for a direction to refund the excess, and a separate application in Form O before the adjudicating officer if you also want compensation. Rule 29(1) puts the Form N complaint before the Authority with a fee of rupees one thousand by demand draft, and Section 29(4) asks the Authority to decide within sixty days or record its reasons. Rule 30(1) sends a compensation claim under Sections 12, 14, 18 and 19 to the adjudicating officer in Form O, again for one thousand rupees, with sixty days under Section 71(2), and Rule 17 gives the promoter sixty days to pay an ordered refund with interest.
The consumer commission stays open in parallel. Section 88 keeps the Act "in addition to, and not in derogation of" any other law, and the Supreme Court in M/s Imperia Structures Ltd v Anil Patni, decided on 2 November 2020, held that the Section 79 bar reaches only civil courts. Section 69(1) of the Consumer Protection Act, 2019 requires that complaint within two years of the cause of action. Run one forum for one relief. The firm's RERA and homebuyer disputes practice handles the Authority route and the consumer protection practice the commission route.
What I tell clients is that this case is won or lost on the day of possession, not in the hearing hall. The Authority reads three documents: the registered agreement, the possession letter and your protest letter with the receipts. If the protest letter exists and names each charge, the complaint is arithmetic and the promoter's only defence is a clause he cannot find. Where these cases actually turn is on whether the corpus receipt says "deposit".
What do I do on the day of possession, step by step?
- Read the possession letter against the price break-up in clause 1.2 and the payment plan in Schedule C of your registered agreement. Mark every demand with no line in the agreement.
- Ask in writing for the basis of each marked demand: the order, the measurement, the tax invoice.
- Pay the undisputed balance on time. Section 19(7) interest at the Rule 16 rate runs on the sums the agreement fixes.
- Write the protest letter dated the day of payment, listing each disputed charge as paid to obtain possession and under protest, and reserving the complaint under Section 31. Get it acknowledged.
- Sign an acknowledgement of possession, not a no-claims declaration, with a dated snag list annexed and the occupancy certificate number noted.
- Collect receipts that name each payment by head.
- Take the keys within two months of the occupancy certificate as Section 19(10) requires.
- File Form N, and Form O if compensation is claimed, with the agreement, the protest letter and the receipts annexed.
What does it cost and how long does it take?
The statutory fees are fixed: one thousand rupees for Form N under Rule 29, one thousand for Form O under Rule 30, and five thousand for an appeal to the Tribunal under Rule 33. The statutory clocks are sixty days at every stage, but listing runs well beyond them and a promoter's appeal adds months, so a contested refund takes months, not weeks. A buyer still deciding whether to register should first read the difference between a sale agreement and a sale deed.
The forum fees are fixed by the Rules and the clocks by the Act.
Form N, one thousand
Rule 29 puts a refund or direction complaint before the Authority in Form N with a fee of rupees one thousand by demand draft.
Form O for compensation
Rule 30 sends a compensation claim under Sections 12, 14, 18 and 19 to the adjudicating officer in Form O, also with a fee of one thousand rupees.
Sixty-day clocks
Section 29(4) asks the Authority to dispose of an application within sixty days, Section 71(2) gives the adjudicating officer sixty days, and Rule 17 gives the promoter sixty days to pay a refund.
Frequently Asked Questions
Can the builder refuse to hand over the keys until I pay the extra charges?
He can refuse until you pay what the registered agreement fixes, because Section 19(6) makes those payments your obligation. He has no basis to hold the keys for a charge the agreement does not contain, and the fix is to pay the disputed sum under a same-day protest letter, take possession within the two months Section 19(10) allows, and reclaim it under Section 31.
Is "super built-up area" a legal basis for a price increase?
No. The model agreement prices the flat on carpet area as defined in Section 2(k), and clause 1.7 allows an increase only where the measured carpet area has grown, capped at three percent and charged at the agreed rate per square foot. Rule 4(3) requires even an older project to disclose size on carpet area.
Do I have to pay GST on the maintenance deposit or the club fee?
Only if the underlying charge is itself payable under the agreement, and only against an invoice that cites the notification and its date, which clause 1.2 requires the promoter to give you. Whether a particular deposit attracts the tax at all is a question for the invoice, not for the demand letter.
I already signed the no-dues letter. Have I lost my rights?
Not the statutory ones. Section 14(3) defect liability and Section 18(3) compensation survive because Section 89 gives the Act effect over an inconsistent contract, and Pioneer Urban treats a term the buyer had no option but to sign as not binding. The letter does make the refund of specific charges harder to prove, so write the protest now, late, rather than never.
Can the builder charge maintenance from the occupancy certificate date if I have not taken the keys?
After the two-month window in Section 19(10) closes, yes. Clause 7.3 of the model agreement makes an allottee who fails to take possession in time liable for maintenance charges, so dispute the demand in writing and take possession inside the window.
The brochure said the clubhouse was included and now there is a membership fee. What applies?
If the clubhouse is in the amenities schedule of the registered agreement, its cost is inside the total price under clause 1.2 and a separate fee is double charging. If the promise lived only in the brochure, Section 12 entitles you to compensation for loss caused by an incorrect or false statement in an advertisement or prospectus.
Can I go to the consumer commission instead of K-RERA?
Yes. Section 88 keeps other laws available and the Supreme Court in Imperia Structures held that the allottee chooses between the consumer forum and the Authority. The consumer complaint must be filed within two years of the cause of action under Section 69(1) of the Consumer Protection Act, 2019, and the same relief should not be pursued in both forums at once.
Will interest run against me if I withhold the disputed amount?
Only on sums the agreement fixes. Section 19(7) charges interest at the Rule 16 rate, the State Bank of India's highest marginal cost of lending rate plus two percent, on a delayed payment of an amount due under Section 19(6), which is why the safer course is to pay under protest and reclaim, and to withhold only what the agreement never priced.
This article is for general informational purposes only and does not constitute legal advice. Consult a qualified advocate for advice on your specific situation.
