Allotment letter: what you commit to, and when your money stops being refundable

7.3.1 What is an allotment letter?

An allotment letter is the builder’s written confirmation that a specific flat in a registered project is allotted to you. It follows the booking form and the booking amount. It names the flat, the tower and the floor, the carpet area, the price and the payments made so far. Ask that it also lists the next payments and the date for the agreement for sale. Under Section 2(d) of the RERA Act, 2016, a person to whom a flat has been allotted, sold or transferred is an allottee. So the allotment letter is the point at which you become an allottee, with the rights the Act gives. The letter must come after the K-RERA registration. Section 3(1) bars a builder from booking or selling a flat in a planning area before registration. If you hold an EOI, the allotment letter is where it becomes a booking of a specific flat.

Document	When	What it does
EOI letter	Before K-RERA registration	A place in the queue, not a flat
Booking form	After registration	Your request to book a flat
Allotment letter	After the booking amount	Confirms a specific flat is yours
Agreement for sale	Before more than 10 percent is paid	The full contract, registered

7.3.2 What should an allotment letter contain?

An allotment letter must describe your flat and your money exactly, and it must not conflict with what the builder filed on K-RERA. The Karnataka RERA Rules, 2017 list a proforma of the allotment letter among the documents in Form A, the application for registration. Section 4(2)(g) of the RERA Act separately requires a proforma of the agreement for sale. So ask the builder for the proforma it filed, and compare your letter with it. Check the flat number, the tower, the floor and the carpet area against the K-RERA page and the cost sheet. Check the total price and each charge against the cost sheet. Check the payments listed, and match them with your receipts. Look for the cancellation terms, and note any deduction. Check the date for the agreement for sale. If a promise from the sales team is not in the letter, ask for it in writing. Do not accept a letter with blank fields.

Item in the letter	Check against
Flat number, tower, floor, carpet area	K-RERA page and cost sheet
Total price and charges	Cost sheet
Payments made	Your receipts
Cancellation terms	Proforma filed with the K-RERA application
Date for the agreement for sale	A written date from the builder

7.3.3 When does your money stop being refundable?

How much of your money is refundable depends on the written terms you accepted. The allotment letter and the agreement for sale decide what you lose. Before allotment, an EOI is governed by the EOI terms. After allotment, the cancellation clause sets the deduction if you withdraw without any fault of the builder. It is in the letter, and later in the agreement for sale. The RERA Act does not set one deduction for every project. It does protect you in other ways. Section 11(5) says the builder can cancel an allotment only in terms of the agreement for sale. If the cancellation is unilateral and without sufficient cause, you can approach K-RERA. Section 18(1) gives you a refund with interest and compensation if the builder fails to give possession by the agreed date. So the risk of losing money comes mainly from your own withdrawal. Read the cancellation terms before you accept the letter.

Who withdraws	What decides the outcome	Source
You, with no fault of the builder	Cancellation terms in the letter and agreement	Your written terms
The builder, outside the agreement	You can approach K-RERA	Section 11(5)
The builder fails to deliver on time	Refund with interest and compensation, or monthly interest	Section 18(1)

7.3.4 How is the allotment letter different from the agreement for sale?

The allotment letter confirms which flat is yours, and the agreement for sale is the full contract that binds both sides. Section 13(2) of the RERA Act lists what the agreement for sale must specify. That includes the particulars of development, the specifications, and the dates and manner of payments. It also includes the possession date, and the interest each side pays on default. Section 13(1) says the builder cannot take more than 10 percent of the cost as an advance or application fee. A written agreement for sale must be signed and registered first. So the allotment letter covers a short period, between the booking and the registered agreement. Use that time to read the draft agreement. Ask for it soon after the letter, and compare it with the proforma agreement on the K-RERA page. The agreement for sale chapter explains the clauses to read.

Point	Allotment letter	Agreement for sale
Purpose	Confirms your flat	The full contract
Registered	Not required by the Act	Yes, before more than 10 percent is paid
Contents set by law	No list in the Act	Section 13(2) lists them
Payment limit before it	Within 10 percent	After it, as per the schedule

7.3.5 What should you check before you accept an allotment letter?

Before you accept an allotment letter, check the project, the flat, the money and the exit terms. Open the project on the K-RERA portal, and check that it is registered and that your tower is in the registered phase. Check that the letter names the same company as the promoter on K-RERA. Check that the flat details and the price match the cost sheet. Add up every payment so far, and check that the total is within 10 percent of the flat’s cost. Read the cancellation terms, and note the deduction and the refund time. Ask for the date of the draft agreement for sale, in writing. Pay only to the project account that the K-RERA page or the agreement names. The booking amount chapter explains how to pay safely. Keep the letter with your booking form, cost sheet and receipts. These are your proof if you later need a refund or file a complaint.

1. Check the K-RERA registration and the phase of your tower.
2. Check that the promoter’s name matches.
3. Match the flat and the price with the cost sheet.
4. Check that your total payment is within 10 percent.
5. Read the cancellation terms and the date for the agreement.

Sachi reads K-RERA filings for Bangalore projects, including the proforma documents. To check a project before you accept an allotment letter, Ask Sachi.