MahaRERA ruling: Developer cannot shift promised stamp duty to buyer

The ruling also addresses unregistered agreements and when buyers can still claim RERA protection

 

A developer cannot simply withdraw a promise to pay stamp duty and registration charges after a homebuyer has booked a property on that understanding, the Maharashtra Real Estate Regulatory Authority (MahaRERA) said in a recent order.

 

The ruling is important for homebuyers because developers often use offers such as “zero stamp duty” or “free registration” to attract bookings, particularly during project launches. MahaRERA’s order makes clear that such promises can matter later if they are recorded in allotment documents or reflected in the developer’s own regulatory disclosures.

 

The case involved a buyer who booked a plot in a development project near Mumbai and paid more than Rs 1.50 crore towards the transaction, including the sale consideration, maintenance security deposit and corpus fund.

 

 

An allotment letter and a notarised agreement for sale were executed on March 11, 2025. However, the agreement was not registered. The buyer alleged that the allotment letter specifically stated that the developer would bear the stamp duty and registration charges. The developer later sought to make the buyer responsible for these costs.

 

Developer said it was a typographical error

 

The developer argued that the buyer could not claim the status of an allottee under the Real Estate (Regulation and Development) Act, or RERA, because the agreement for sale had not been registered.

 

It also claimed that the reference in the allotment letter to the developer bearing stamp duty and registration charges was merely a typographical error. According to the developer, the subsequently executed agreement placed the liability on the purchaser.

 

MahaRERA rejected this argument. It noted that the developer had issued an allotment letter and accepted substantial payments from the buyer.

 

More importantly, the authority found that the developer's own deviation report uploaded on the MahaRERA portal stated that the developer would bear stamp duty and registration charges payable on the agreement and related documents.

 

“MahaRERA can take into account the developer’s own project disclosures,” said Adhiraj Harish, partner at law firm D.M. Harish & Co. LLP. According to him, a promoter cannot subsequently resile from a representation made to a purchaser when that representation is consistent with its own disclosures and commitments during the booking process.

 

What does the ruling mean for homebuyers?

 

The order does not mean that developers will always have to pay stamp duty and registration charges. The liability will normally depend on the applicable law and the contractual terms agreed between the parties.

 

“The decision makes it clear that a developer cannot easily go back on a commitment made to a homebuyer at the time of allotment,” said Saloni Paliwal, advocate, Delhi High Court. However, she stressed that the outcome will depend on what was specifically promised in each case.

 

Tusi Kumar, partner at Singhania & Co., noted that Section 29 of the Indian Stamp Act, 1899 generally determines who bears stamp expenses in the absence of an agreement to the contrary. For a conveyance, the statutory framework places the expense on the grantee or purchaser unless the parties agree otherwise.

 

This distinction is important. A buyer should not assume that every “free registration” or “zero stamp duty” marketing offer automatically transfers the legal liability to the developer. The strength of the claim will depend on whether the promise was actually documented and whether the developer's other disclosures support it.

 

Unregistered agreement

 

The case also carries a separate lesson on unregistered agreements.

 

Section 13 (1) of RERA prohibits a promoter from accepting more than 10 per cent of the cost of an apartment, plot or building as an advance or application fee without first entering into a written and registered agreement for sale.

 

In this case, MahaRERA noted that the developer had received almost the entire consideration even though the agreement remained unregistered. It directed both sides to register the agreement and held that the buyer did not lose allottee status merely because the agreement had not been registered.

 

“This decision also indicates that a purchaser may not lose protection under RERA merely because the agreement for sale was not registered, particularly where the developer accepted substantial amounts without executing the required agreement,” said Alay Razvi, managing partner, Accord Juris.

 

Tushar Kumar, advocate, Supreme Court of India, said the developer should not be allowed to benefit from its own non-compliance with Section 13. He said the ruling provides meaningful precedent where developers later attempt to alter material financial obligations or other terms on which the original booking was made.

 

What buyers should preserve

 

The ruling highlights why homebuyers should retain every document and communication issued before and during booking. This includes:

 

• Allotment letters and booking forms
• Brochures and advertisements mentioning special offers
• Payment receipts and bank records
• Emails and messages exchanged with the developer
• The project's MahaRERA disclosures
• Copies of draft and final agreements

 

“Developers often give lucrative offers such as zero stamp duty or free registration schemes to attract prospective homebuyers,” said Supriya Majumdar, partner, Elarra Law Offices. According to her, the ruling makes developers accountable for assurances recorded in allotment letters once the booking amount has been accepted.

 

For buyers facing a similar dispute, the key question is therefore not simply who normally pays stamp duty. It is whether the developer made a specific, documented promise and whether that promise is supported by its own project disclosures.

 

MahaRERA also directed the developer to pay interest to the buyer for nearly four months of delayed possession. The order therefore serves as a broader reminder: buyers should examine the documents and regulatory disclosures at the booking stage itself, rather than relying only on verbal assurances or promotional claims.