Best Builder Demanding High Transfer Charges on Resale Lawyer

Selling a flat before possession is common in the NCR. Plans change, families move, investors want out of a project that's taking too long, and a buyer comes along who's willing to step in. But the sale can't complete without the builder. The builder has to endorse the transfer of the allotment to the new buyer, and many builders use that moment to charge heavily: a transfer fee per square foot, "administrative charges", demands that all disputed dues be cleared first, or a flat refusal until a certain percentage of the price has been paid.

This page explains how transfers of allotment work, what builders can and can't insist on, and what both sellers and resale buyers should check. It also covers a question that matters a great deal to resale buyers in delayed projects: whether they can claim delay compensation.

How a transfer of allotment works

Before the conveyance deed is executed, you don't own the flat in the land records. What you hold is an allotment and a contract with the builder, under the agreement for sale. When you "sell" an under-construction flat, you're really transferring that allotment and your rights under the agreement to the buyer. That's why the builder's involvement is needed.

The usual steps are:

1. seller and buyer agree the price and sign an agreement between themselves;
2. the seller applies to the builder for a transfer, usually on the builder's own form, with an affidavit, the original allotment documents and an indemnity;
3. the builder issues a statement of account showing what's been paid and what's due, and confirms the transfer fee;
4. if there's a home loan, the seller's bank issues a no-objection and the loan is closed or transferred;
5. the builder endorses the allotment in the buyer's name, or issues a fresh allotment letter and agreement; and
6. the buyer pays the seller, often partly to clear the seller's loan.

Under the Real Estate (Regulation and Development) Act, 2016, the definition of allottee in Section 2(d) includes a person who subsequently acquires the allotment through sale, transfer or otherwise. So once the transfer is endorsed, the new buyer is an allottee with rights under the Act.

What the builder can lawfully charge

RERA doesn't fix transfer fees. The starting point is your agreement for sale. Most agreements allow transfer of the allotment with the builder's consent, on payment of a transfer fee, sometimes stated as an amount per square foot and sometimes as "as applicable at the time".

• If the agreement fixes the fee, that's what the builder can charge.
• If the agreement says "as applicable", the builder's discretion isn't unlimited. A fee that is arbitrary, wildly out of line with the builder's own past practice, or plainly designed to block transfers is open to challenge as unreasonable.
• If the agreement says nothing, the builder has a weaker basis for charging any significant fee, though a reasonable administrative fee for processing may be accepted.

Some builders don't charge transfer fees between close family members, such as on transfer to a spouse or child, or on inheritance. Check the agreement and the builder's policy.

Conditions builders commonly impose

"Clear all dues first"

Builders often insist that all outstanding demands be paid before they'll endorse a transfer. Where the demands are genuinely due under the agreement, that's reasonable. Where they're disputed, such as an unexplained escalation charge or interest at a penal rate, the builder shouldn't be able to use the transfer as leverage to force payment of disputed sums. The dispute can continue with the new buyer stepping into the seller's position, or the disputed amount can be kept aside pending resolution.

"Minimum payment before transfer"

Some agreements prevent transfer until a certain percentage of the price, say 30% or 50%, has been paid. That's a contractual restriction, and if it's in the agreement, it generally applies.

"No transfers in this phase"

A builder that has sold units with a transfer clause can't simply announce that transfers are suspended, unless the agreement allows it. A blanket refusal can be challenged.

"Fresh agreement on new terms"

Sometimes the builder insists that the new buyer sign a fresh agreement on current terms, with a later possession date or higher charges. A transferee generally steps into the original allottee's position, not a worse one. The new buyer should be cautious about signing a fresh agreement that dilutes the original terms.

Can a resale buyer claim delay compensation?

This is one of the most important questions for anyone buying an under-construction flat in a delayed project, and it has caused real disagreement.

Builders argue that a resale buyer who bought after the possession date had passed knew about the delay and shouldn't be compensated for it, or that the buyer stepped into the seller's shoes only from the date of transfer. Buyers argue that the builder's obligation to give possession by the agreed date was unchanged, and the transferee inherits the original allottee's rights in full.

The Supreme Court addressed this in Laureate Buildwell v. Charanjeet Singh (2021). It held that a subsequent purchaser isn't disentitled from claiming compensation for delay merely because they bought the allotment from an earlier buyer. Each case depends on its facts, including when the transfer happened and what the purchaser knew. In practice, authorities and commissions have differed on the details, especially on whether delay compensation runs from the original due date or from the date of the transfer endorsement.

For a resale buyer, this means:

• you generally can claim delay compensation as an allottee;
• the amount may depend on when you bought, relative to the possession date;
• keep the builder's transfer endorsement, any fresh assurances it gave you about possession, and the date you became the allottee; and
• check how your authority has treated transferees in recent orders before filing.

What sellers should check

• Your statement of account. Ask the builder for it early, and check it against your records, so there are no surprises when the transfer is processed.
• Any pending claims. If you have a RERA complaint or claim for delay interest, decide whether you're transferring that claim to the buyer or keeping it. Put it in your agreement with the buyer. Builders often argue that any delay claim passes to the transferee, or disappears.
• Your home loan. The bank will need to be repaid or the loan transferred. Get the bank's closure figure and no-objection process in advance.
• The transfer fee. Check it against the agreement, and if it's unreasonable, object in writing before paying.
• Tax. Selling an allotment can give rise to capital gains tax. If the buyer deducts tax at source, make sure it's properly reported. A chartered accountant can advise on your position.

What resale buyers should check

• The original agreement and every addendum. You'll be bound by its terms.
• The builder's statement of account, confirming what's been paid and what's due.
• The project's RERA registration and quarterly updates.
• Pending disputes: any RERA complaint, consumer case or cancellation notice on the unit.
• Loans and charges: the seller's bank's no-objection and confirmation of closure.
• The endorsement itself: make sure the builder endorses the allotment in your name, not just a "nomination" or a power of attorney arrangement.
• What happens to delay claims as between you and the seller.
• The occupancy certificate and registry status, if the project is complete.

Transfers by power of attorney: a warning

Where builders make transfers difficult, some sellers and buyers try to work around them with an agreement to sell, a general power of attorney and a will in the buyer's favour, without any endorsement by the builder. The Supreme Court held in Suraj Lamp and Industries v. State of Haryana (2011) that such arrangements don't transfer title to immovable property. For under-construction flats, they also leave the buyer without a direct relationship with the builder, and dependent on the seller's continued cooperation. It's far safer to go through the builder's transfer process, and to challenge unreasonable conditions if necessary.

Challenging unreasonable transfer conditions

If the builder is charging a transfer fee far beyond what the agreement allows, refusing to process a transfer without good reason, or making the transfer conditional on payment of disputed charges, you can:

1. write to the builder citing the agreement's transfer clause and asking for the transfer to be processed on its terms, offering to pay the fee permitted by the agreement and any undisputed dues;
2. pay under protest, if the sale is time-sensitive, making clear in writing that you dispute the excess and reserve the right to recover it; and
3. file a complaint before the RERA authority seeking a direction to process the transfer on the agreement's terms, and refund of any excess charges.

Authorities have powers to deal with breaches of the agreement and of the Act by promoters. A complaint is particularly worth considering where a builder is blocking transfers across a project, affecting many buyers.

An illustration

A simplified, made-up example.

A seller who booked a 2BHK in Greater Noida in 2016 found a buyer in 2023. The agreement allowed transfer on payment of Rs 50 per square foot. When the seller applied, the builder demanded Rs 250 per square foot as "current transfer charges", plus payment of a disputed escalation demand of Rs 2.8 lakh, before it would endorse the transfer. The possession date had passed in 2020.

The seller can insist on the agreement's rate of Rs 50 per square foot, and argue that the disputed escalation charge shouldn't block the transfer. If the sale is urgent, the seller could pay under protest and claim the excess back. The buyer should check what happens to the delay claim from 2020 onwards. Under Laureate Buildwell, the buyer isn't barred from claiming delay compensation merely because they bought by transfer, though the start date may be contested.

Transfers on death or within the family

Transfers to heirs after an allottee's death, or between family members, are a different situation from a sale. The builder will usually ask for:

• the death certificate;
• evidence of succession, such as a probated will, a succession certificate, or relinquishment deeds from other legal heirs, depending on the facts and the builder's policy;
• an indemnity from the heirs; and
• in some cases, an advertisement in a newspaper inviting objections.

Many builders charge little or no transfer fee for transfers on death or to close family members. If yours is charging a full resale fee on an inheritance transfer, check the agreement and ask for the policy in writing.

Documents to gather

• The original allotment letter and agreement for sale, with addenda
• All payment receipts and the builder's statement of account
• The builder's transfer policy or fee schedule, if published
• Correspondence with the builder about the transfer
• The agreement between seller and buyer
• Bank no-objection and loan closure documents, if relevant
• Succession documents, for transfers on death

Drafting the agreement between seller and buyer

The builder's paperwork deals with the builder's side of the transfer. The seller and buyer also need a clear agreement between themselves, and it's often neglected. It should cover at least:

• The unit, with reference to the original allotment and agreement for sale.
• The price, and how it's split between the seller's equity, repayment of the seller's loan, and any amounts the buyer will pay directly to the builder.
• Who pays the transfer fee and any other charges the builder raises at transfer.
• Who bears future demands from the builder, including disputed charges already raised.
• Delay claims: whether the seller keeps any claim for delay up to the transfer date, or whether the whole claim passes to the buyer, and whether the price reflects that.
• Pending proceedings: what happens to any RERA complaint or consumer case already filed by the seller.
• Timelines for the builder's endorsement, and what happens if the builder refuses or delays.
• Refund of the buyer's payment if the transfer can't be completed.
• Tax deducted at source, where applicable.

Many disputes between sellers and resale buyers arise because these points weren't written down. The builder then exploits the uncertainty, telling each side that the other is responsible.

Transfers in projects that are in trouble

In stalled projects, the market for resale allotments can be thin, and sellers sometimes accept steep discounts just to exit. Buyers of distressed allotments should be particularly careful. Check whether the builder is in insolvency or facing insolvency applications, because the moratorium and the insolvency process will affect the allotment. Check whether the project's RERA registration is valid. And check whether there's any rehabilitation scheme or resolution plan in prospect that might change the terms for existing allottees.

For sellers in stalled projects, a resale isn't the only exit. A refund with interest under Section 18 may be worth considerably more than a discounted resale, if the builder can be made to pay. Compare the two before deciding.

Stamp duty and registration on transfers

In some states, an assignment of rights under an agreement for sale attracts stamp duty, and in some cases the transfer document needs to be registered. The position differs between Uttar Pradesh, Haryana and Delhi, and it has changed over time. Ask the builder what documents it will execute for the transfer, and check the stamp duty position for that document in the state where the property is. Unstamped or under-stamped documents can cause problems later, particularly when the conveyance deed is eventually executed.

How we help with transfers

1. Review the agreement's transfer clause and the builder's demand, and tell you what's lawfully payable.
2. Check the unit's position: statement of account, pending disputes, loans, RERA registration and the builder's financial health.
3. Draft the agreement between seller and buyer, dealing clearly with charges, delay claims and pending proceedings.
4. Write to the builder objecting to unreasonable fees or conditions, and asking for the transfer on the agreement's terms.
5. File a complaint before the RERA authority where the builder refuses or demands excessive charges.
6. Advise resale buyers on their delay claim after the transfer, and file it where appropriate.

Common builder arguments

"Transfer is at our discretion." Only if the agreement says so. Where it permits transfer with consent, consent shouldn't be unreasonably withheld.

"The transfer fee has increased with market rates." If the agreement fixes the fee, it doesn't increase. If it's "as applicable", the increase should still be reasonable and consistently applied.

"The resale buyer knew about the delay." That may affect the start date for delay compensation, but after Laureate Buildwell, it doesn't remove the claim entirely.

"All dues must be paid first." Genuine dues, yes. Disputed charges are a separate matter.

Where to file

Complaints about transfers go to the RERA authority of the state where the project is located: UP RERA, Haryana RERA in Gurugram or Panchkula, or Delhi RERA. Disputes purely between seller and buyer, where the builder isn't at fault, usually belong in a civil court.

Transfers after possession but before registry

A common NCR situation: the flat has been handed over, the owner has lived in it for years, but the builder still hasn't executed the conveyance deed. The owner now wants to sell. Because there's no registered deed, the sale still has to go through the builder as a transfer of allotment, and the builder may charge its transfer fee as if the unit were under construction.

A few points to consider. First, the builder's failure to execute the conveyance deed within the time required by Section 17 is itself a breach, and the owner can press for the registry rather than accept a transfer-of-allotment route. Second, a transfer fee designed for under-construction resales may be hard to justify for a completed flat where the delay in registry is the builder's fault. Third, the buyer should check carefully why the registry is stuck, because the same obstacle will affect them after the transfer. Our page on registry delay explains the usual causes.

A note for buyers using a home loan

If you're financing the purchase of a resale allotment with a loan, your bank will need its own tripartite arrangement with the builder, and will want the builder's endorsement and a permission to mortgage. Builders sometimes charge separately for these. Build the time for this into your agreement with the seller, because banks rarely move as quickly as the parties hope, and a transfer stuck between the builder and a bank can put the whole sale at risk.

Our view

A transfer should be an administrative step, not a negotiation in which the builder extracts as much as it can from both sides. Most transfer disputes can be resolved by holding the builder to the terms of its own agreement. Where that fails, the RERA authority can be asked to step in. Either way, sellers and buyers protect themselves best by writing down, between themselves, exactly who pays what and who keeps which claims.

Frequently asked questions

Does the builder have to allow me to transfer my flat before possession?

If your agreement permits transfer with the builder's consent, the builder should process it on the agreement's terms. Unreasonable refusal can be challenged.

How much can the builder charge for a transfer?

RERA doesn't fix transfer fees. The agreement governs. A fee far beyond what the agreement provides, or plainly arbitrary, can be challenged.

Can the builder insist I clear disputed charges before it endorses the transfer?

Genuine dues, yes. Disputed charges shouldn't be used as leverage. You can pay under protest if the sale is urgent and recover the excess later.

As a resale buyer, can I claim delay compensation?

Generally yes. The Supreme Court held in Laureate Buildwell v. Charanjeet Singh (2021) that a subsequent purchaser isn't disentitled from delay compensation merely because they bought by transfer. The start date can depend on the facts.

Is a power of attorney sale a safe alternative?

No. The Supreme Court has held that agreements to sell and powers of attorney don't transfer title to property. Use the builder's transfer process.

What happens to my pending RERA complaint if I sell?

Decide this with the buyer and write it into your agreement. The builder will argue the claim has passed or lapsed. Clarity protects both of you.

Do transfers on inheritance attract the same fee?

Often not. Many builders charge less or nothing for transfers to legal heirs or close family. Check the agreement and the builder's policy.

Can I complain to RERA about transfer charges?

Yes, where the builder's charges or conditions breach the agreement or the Act.

General information about transfers of allotment under the Real Estate (Regulation and Development) Act, 2016. Tax and stamp duty consequences vary; take specific advice. Not legal advice. The example is an illustration only.