Big relief for homebuyers: UP RERA caps builder fees on these flat transfers, know how it will apply

In what can be seen as good news for homeowners in Uttar Pradesh, the Uttar Pradesh Real Estate Regulatory Authority (UP RERA) has added Regulation 47(c) to specifically regulate and limit the processing fees that real estate builders and developers can charge during the transfer of allotment.

Processing fees levied by builders for transfer of allotment capped if allottee dies

If an allottee (homeowner) passes away due to any unforseen circumstances, then the house property needs to be transferred to a family member’s name. This process has now been made easier and more affordable. According to the Real Estate (Regulation and Development) Act, 2016, “family” includes husband, wife, minor son and a dependent unmarried daughter.

Nishant Arora, Partner at Khaitan & Co gave a clause-wise explanation of the sub-clauses of Regulation 47(c) to ET Wealth Online:


1. No new agreement on transfer of allotment: Regulation 47(c)(i) mandates continuity of contractual obligations by providing that, upon transfer of an allotment, the original agreement for sale or lease executed between the promoter and the allottee shall remain operative and binding on the transferee.

The builder has to record the change of allottee solely through an endorsement on the original agreement and by making corresponding updates in its records, without executing any fresh or revised agreement with the transferee.

2. Procedure on allottee’s death: Sub-clause (ii) applies to inheritance arising upon the death of an allottee. It provides that where the successor-in-interest of the allottee is a ‘family member’, the promoter (builder/developer) can charge a processing fee not exceeding Rs 1,000.

This is subject to the submission of the death certificate of the original allottee, a succession certificate issued by the Sub-Divisional Magistrate or the District Magistrate, and no-objection certificates from all surviving heirs of the original allottee. Copies of such documents are also required to be filed with the Authority.

For the case mentioned above, the successor-in interest has to submit the following documents in the office of the promoter (builder/developer) and file the same documents with the Authority: -

• Death Certificate of original allottee;
• Succession Certificate issued by the Sub-Divisional Magistrate / District Magistrate; and
• No Objection Certificate of all the surviving heirs of original allottee(s).

3. Transfer of allotment to a family member: Sub-clause (iii) primarily deals with transfers or assignments to a family member. It provides that where the successor-in-interest or assignee is a family member of the allottee, the promoter can charge a processing fee not exceeding Rs 1,000.

4. Transfer to non-family members (third parties): In cases where the successor-in-interest or assignee is not a family member of the allottee, the builder cannot charge a processing fee exceeding Rs 25,000.

Why does the builder charge a processing fee if the owner has died?

According to Arora, in case of the death of an allottee, the allotment has to be transferred in the promoter’s records to the legal heir(s)/successor(s) of the allottee, which involves verification of succession documents and updating of records.

Arora says that the processing fee is levied by builders to cover the administrative costs of carrying out these steps. However, now that such fee is now specifically regulated under UP-RERA, which prescribes a capped amount to ensure that such transfers are duly recorded while preventing promoters from levying arbitrary or excessive charges.