Yes, a builder may be able to charge additional money after an agreement is signed, but only if the extra charge is legally justified and permitted under the agreement or applicable law. A builder generally cannot arbitrarily demand additional amounts that were not disclosed or agreed upon.
When can a builder charge extra money?
Additional charges may sometimes be valid if they relate to:
- Government taxes, GST, stamp duty, registration charges or statutory levies that change or become applicable after the agreement.
- Charges specifically mentioned in the builder-buyer agreement, provided the relevant terms are clear.
- Additional facilities or modifications requested by the buyer after signing the agreement.
- Certain development, infrastructure or other statutory charges, where the agreement and applicable regulations permit the builder to recover them.
However, if the builder suddenly demands extra money for vague reasons, increases the agreed price without contractual or legal justification, or introduces charges that were not properly disclosed, the buyer can challenge the demand.
What should a buyer do?
The buyer should first check the signed agreement carefully and identify the clause under which the builder is demanding the additional amount. Ask the builder for a written calculation and supporting documents explaining why the amount is payable.
If the demand appears unjustified, the buyer should avoid making an unsupported payment and can send a written objection. Depending on the circumstances, the buyer may also approach the state RERA authority or a consumer commission for appropriate relief.
The exact legal position depends on the wording of the agreement, the nature of the additional charge, the project's RERA registration, and the applicable state laws. For a significant amount, it is advisable to have the agreement reviewed by a property lawyer before making payment.
