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Rajiv Vaidya   21 February 2024

What’s the rule for registering a property that has both construction and sale agreement?

Builder is not ready to register it on total cost. SBI insists on doing it on the total cost of the property as per RERA and stamp duty act Karnataka.


 4 Replies

Shashi Dhara   21 February 2024

Issue legal notice to builder to register it if not file suit for specific performance of contract.

T. Kalaiselvan, Advocate (Advocate)     21 February 2024

According to the rules, for a building under construction, in addition to the registration of the UDS (payment of 11% of the value as stamp duty and registration fees), a construction contract is signed between the developer and the buyer through a deed of sale

The buyer only has to pay 2% (1% stamp duty and 1% registration fee) for the registration of the construction contract. If the building is not included in the deed of sale, the savings for the buyer is 9% of the cost of the building. But the other side of the coin is that there is no deed of sale for a new apartment at the time of the first sale. If the same apartment is resold, the buyer must pay 11% stamp duty and registration fee for the UDS and the value of the apartment. In fact, the building does not receive a deed of sale until the second sale. However, many sub-registrars have refused to include UDS alone in the deed of sale of completed real estate, even if it is an initial sale. They stated that there can be no construction agreement between the buyer and the developer once the building is completed and the regulator (such as the CMDA or the DTCP) has issued a certificate of completion.

Rajiv Vaidya   21 February 2024

Thanks for the information. 

This is not a resale property, the situation is that the Bank has already made a payment of 50lkh to the Builder, and for the remaining 20lkh they will not provide the DD unless the registration of the property is done on the full value(sale + construction). I am ready to register it for the full value but the builder is not ready. Isn't it illegal what the Builder is doing here? How should I proceed? 

T. Kalaiselvan, Advocate (Advocate)     21 February 2024

The builder would have informed you about two deeds earlier itself at the time of booking.

The bank is also knowing about it.

The bank can very well grant loan for purchase of land(UDS) and for construction (construction agreement) simultaneously or combined together.


You can talk to builder and explain your situation and ask him what can be done on this or whether he will convince Bank directly.

There's no point in taking legal action if he has not violated the conditions of the agreement.

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