Legal & Documents
What is an Allotment Letter?
The first document with your name and a flat number on it. Which is not the same as the flat being yours.
The short answer
An allotment letter confirms that a builder has assigned a specific unit to you — tower, floor, flat number — at an agreed price, on an agreed payment schedule.
It is a real document with real value. It is not a transfer of ownership, and it is not a substitute for the agreement for sale — which, under RERA, must follow before the builder takes more than 10%.
What an allotment letter is
It follows the booking. The builder writes to you and says: this flat is yours to buy, at this price, on these terms, and here is what you owe and when.
It is the first document that ties you to a specific unit. Everything before it was general.
What it should contain
- Your full name and details
- The specific unit — project, tower, floor, flat number
- The carpet area — and, separately, the super built-up area if they price on that
- The total price, broken down: base rate, PLC, floor rise, car parking, club charges, corpus fund, taxes
- The payment schedule
- The expected possession date
- The amount already paid, and that it is adjustable against the price
- Cancellation terms
The base rate is not the price. The price is the base rate plus preferential location charge, floor rise, car parking, club membership, corpus fund, maintenance advance, GST, stamp duty and registration.
Those extras routinely add 10–15% to the headline figure — and they have a habit of appearing after you have committed.
Insist that every charge is itemised on the allotment letter. A builder who is reluctant to write down the full price is telling you something about what it is.
What an allotment letter is NOT
- It is not a transfer of ownership. That's the sale deed, years away.
- It is not the agreement for sale. That's a separate, registered document — and under Section 13 of RERA it must be executed before the builder takes more than 10% of the price.
- It is not, on its own, strongly enforceable. It is a letter, not a registered contract.
Some builders issue an allotment letter, collect 20–30%, and postpone the agreement for sale indefinitely.
That is a breach of Section 13 of RERA, which caps the advance at 10% before a written, registered agreement for sale.
It also leaves you badly exposed: the allotment letter contains none of the protections the agreement does — the delay penalty, the carpet area guarantee, the cancellation terms, the specifications.
Why the bank wants it
Your home loan application will need it. The bank uses the allotment letter to confirm which unit, at what price, on what schedule — so they can structure the disbursal.
Which is a useful lever: a builder who won't give a proper allotment letter is a builder whose flats are hard to finance. That is a fact you can state, calmly.
What to check
- Every charge is itemised. No "other charges as applicable".
- The carpet area is stated, and matches the RERA filing.
- The possession date matches what the RERA portal declares.
- The unit is specific — not "a 3 BHK in Tower B".
- The amount you've paid is acknowledged, and stated to be adjustable against the price.
- The cancellation terms are there, and you can live with them.
- The agreement for sale is scheduled — and the builder is not asking for more than 10% before it.
Frequently asked questions
Is an allotment letter proof of ownership?
No. It confirms that a builder has assigned a specific unit to you at an agreed price. Ownership passes only on a registered sale deed, which is usually years away.
Is an allotment letter the same as an agreement for sale?
No, and this matters. The agreement for sale is a separate, registered document containing the real protections — carpet area, possession date, delay penalty, cancellation terms. Under Section 13 of RERA, a builder cannot take more than 10% of the price before executing and registering it. An allotment letter is not a substitute.
What should an allotment letter contain?
Your details, the specific unit, the carpet area, the FULL itemised price — base rate, PLC, floor rise, parking, club charges, corpus, taxes — the payment schedule, the possession date, the amount already paid, and the cancellation terms.
Do I need an allotment letter for a home loan?
Yes. Banks use it to confirm the unit, the price and the payment schedule so they can structure the disbursal. A builder who won't issue a proper allotment letter is a builder whose flats are difficult to finance — a fact you can point out.
Can a builder cancel an allotment?
Depending on the terms — typically if you default on the payment schedule. Read the cancellation clause, and note how much they may forfeit. Negotiate a cap before you accept the letter, not after.