This demand by the developer is legally vulnerable and largely unenforceable under Indian property laws, consumer protection jurisprudence, and Maharashtra real estate regulation.
Exorbitant transfer fees or escalating NOC charges levied by developers on resale properties are routinely struck down by legal forums as unconscionable, arbitrary, and an unfair trade practice.
Under Maharashtra law, even a fully formed Cooperative Housing Society (CHS) is strictly capped by a State Government Circular (under Section 79A of the MCS Act, 1960) to a maximum transfer premium of ₹25,000. A builder—acting in a promoter/interim administrative capacity—cannot demand ₹4.14 lakh for a simple administrative NOC when the law caps society transfer charges at ₹25,000.
A contractual clause that violates statutory principles, public policy, or basic fairness is unenforceable in court. Developers are only entitled to charge a nominal, reasonable processing fee (typically ₹500 to ₹5,000) to issue a "No Dues Certificate
Write an official email/letter to the senior management and customer relationship team at Gera Developments,
asking them to furnish NOC, failing which you may approach Consumer Disputes Redressal Commission (District/State),for Deficiency in service and Unfair Trade Practice (Consumer Protection Act, 2019).
Besides You can file a formal complaint under Section 31 of RERA seeking a direction against the developer to restrain them from demanding arbitrary transfer fees or blocking the transfer of rights.
NOC charges demand from builder on sale of new flat
Dear Legal Team, I am a resident of Mumbai and seek your legal advice regarding the sale of my apartment in Pune. In 2022, my wife and I purchased a 2 BHK apartment from Gera Developments for approximately ₹93 lakh. We took possession of the apartment at the end of May 2026, having completed all payments, including those due at possession. We now have possession. We are now in the process of selling the apartment. However, we have been informed that, under a clause in the Agreement for Sale, the builder has levied NOC charges based on a 10% year-on-year escalation from 2022, resulting in a demand of approximately ₹4.14 lakh merely for issuing a - (NOC) No Objection Certificate. We find this demand to be excessive and disproportionate for the following reasons: We have held the property for nearly four years, funded largely through a home loan. Despite this, the appreciation on the property's sale is expected to be only around 5%. The NOC charges alone consume a substantial portion of the gains, making the sale commercially unviable. The fee appears to bear no reasonable relationship to the administrative cost of issuing an NOC. Additionally, in May 2026, I purchased another 3 BHK apartment from the same builder. The sale proceeds from this 2 BHK apartment are intended to fund my financial commitments towards the new property. These NOC charges are therefore placing me under considerable financial strain. I would appreciate your guidance on the following: Is such an escalating NOC charge legally enforceable under RERA, the Maharashtra Apartment Ownership Act, or any other applicable law? Can a builder levy a transfer/NOC fee of this magnitude, even if such a clause exists in the Agreement for Sale? What legal remedies are available if these charges are arbitrary, unreasonable, or unfair? Would this be an appropriate matter to challenge before MahaRERA or the Consumer Commission? I would be grateful for your advice on the legal position and the best course of action. Thank you for your time and guidance. Savio.
First answer received in 30 minutes.
Lawyers are available now to answer your questions.
14 Answers
Clauses that mandate year-on-year escalation on NOC fees—especially when the builder is no longer managing the society—are routinely deemed unfair and unconscionable Unreasonable
2)the sale is time-sensitive and you must obtain the NOC immediately, pay the amount under protest. State clearly in writing that the payment is being made to execute the sale, without prejudice to your right to recover it through legal channels.
3)file a formal complaint before the MahaRERA Conciliation and Dispute Resolution Forum or approach the Consumer Court for a refund of the excess charges with interest
4) you have good case on merits
In my view the escalation clause would apply only when the flat buyer intends to sell the flat when it is under construction and possession is not given to the flat buyer and OC for the building is not received
when the OC is received and possession is handed over there absolutely no need to pay any transfer charges to the builder
the builder's demand is illegal
nothing stops you from selling the flat since you are in possession
had the flat been under construction and you would have sold it then the builder could demand the transfer charges and failing such payment the builder would not recognise your buyer and would not give possession to your buyer. Thus, to avoid such a situation it would be prudent to pay the transfer charges in those circumstances
however in your case the building is complete and the possession is with you, so there is no need to pay anything to the builder
even if there is any clause in the agreement which requires the flat buyer to pay transfer charges after he has been put in possession, then in my view such a clause is illegal and nothing but a blanket clause having no legal enforceability
you can very well sell the flat without any reference to the builder
at the highest the builder will not submit the name of your buyer to the society of flat buyers as and when it is formed
however the buyer in such a case would not be remediless and the society would have no option but to accept the buyer as its member. If it does not the buyer can simply approach the district deputy registrar of co-operative societies for a direction to the society to issue a share certificate to the buyer, which the DDR will readily grant
so i do not see any impediment at all against selling your flat
you must ignore the builder's illegal demand
he is out now. tell him to convey the land and building and form the society
This problem arises due to a clause in the sale agreement.
To escape this liability first get your falt registered in your name by way of a registered deed of sale.
Once that is done the developer is divested of all his power or control over this flat and you being the absolute owner of the same becomes free to deal with it in any manner you like.
Dear Sir/Madam,
The said charges are unreasonable and you are suggested to approach consumer forum as it will have better remedy than RERA.
Dear Sir/Madam,
A builder cannot ordinarily demand an arbitrary ₹4.14 lakh merely for issuing an NOC after full payment and possession. Even if mentioned in the Agreement for Sale, an excessive escalation clause may be challenged as unfair, unreasonable and unrelated to any genuine administrative service.
First demand the legal basis, detailed calculation and tax invoice in writing, and ask the builder to process the resale without such charges. If the project is still under the builder’s control, you may file a complaint before MahaRERA under Section 31; a Consumer Commission complaint for unfair trade practice is also maintainable.
Have a Pune property lawyer examine the exact agreement clause and issue a legal notice before making payment. Do not pay under pressure without recording a written protest.
Advocate Saurabh Agrawal
Here is the reply I received by the builder to my ealier question answered above (Yesterday on NOC for flat sale) : Kindly suggest your opinion and my next steps in accordance. I am a resident of Mumbai and the property in ask is at Pune. The flat is registered in my name and we are the first owners looking for a re-sale with a TOKEN amount received. ------------------------------------------------------------------------------------------------------------- Dear Mr. Dcunha, Thank you for sharing your concerns. We understand your disappointment and appreciate you taking the time to explain your perspective. We would like to clarify that the transfer charges communicated to you have been calculated in accordance with the terms and conditions of your registered Agreement for Sale. The applicable rate is derived from the base rate prevailing at the time of registration and is escalated annually as stipulated in the agreement. Applicable GST has also been levied as per statutory requirements. Please note that these charges are contractual in nature and are uniformly applicable in accordance with the provisions of the Agreement. Accordingly, we are not in a position to revise or waive the transfer charges. We understand that you have compared this with practices followed by other developers. However, the policies governing transfer charges may differ from one developer to another and are based on the respective contractual terms agreed upon at the time of purchase. We regret any inconvenience this may cause. Nevertheless, we are bound to process the Transfer NOC in accordance with the executed Agreement for Sale. Should you require any further clarification regarding the calculation of the transfer charges or the transfer process, please feel free to reach out to us. We will be happy to assist you.
Pay transfer charges under protest
file case before consumer forum seek refund of transfer charges with interest
akso claim litigation costs and compensation fir mental torture undergone by you
Dear Client, Even if a clause in your agreement for sale permits the builder to charge transfer or NOC fees and escalating demand of approximately 4.14 lakh Calculated on a 10% year on year basis is legally vulnerable highly dis appropriate and open to challenge under Maharashtra law even a fully formed cooperative housing society is strictly capped by the state directives to a maximum transfer premium of rupees 25,000 to prevent profiteering from property transfers A builder acting in an interim or promotional capacity cannot exploit contractual clauses to Levy arbitrary penalty like sums that bear no rational Nexus to the actual administrative cost of issuing a simple no dues or no objection certificate contractual terms that are excessively one sided or contrary to public policy can be contested as unfair trade practices.
You have strong legal grounds to challenge these exorbitant charges before both MahaRERA Maharashtra Real Estate Regulatory Authority under section 31 of the Real Estate Regulation and Development Act for imposing unfair conditions and the Consumer Dispute Redressal Commission for deficiency in service and unfair trade practices because you have already taken legal possession of the 2 BHK apartment and cleared all purchase divorce the builders attempt to block or heavily packs your resale process to extract a disproportionate amount can be legally restrained the Maharashtra Real Estate Regulatory Authority and consumer forums have previously intervened and ruled against developers attempting to enforce arbitrary hefty transfer fees that takes away a homeowner’s freedom of alienation and property rights.
As an immediate course of action, you should instruct a real estate lawyer to issue a formal legal notice to the builder demanding a justification and breakdown of the fees against actual administrative expenses Simultaneously you can file a formal complaint before MahaRERA seeking interim relief or directions to prevent the builder from withholding the NOC arbitrarily which will protect your financial timeline for funding your new purchase 3 BHK property. I hope this answer helps, if you have any further query kindly do not hesitate to contact us. Thankyou
The builder’s reply is standard denial based on the terms of the sale agreement, you may just ignore it. Under Indian law, an unconscionable, one-sided clause in a standard-form agreement does not become legally valid simply because it was registered. Contractual clauses cannot override statutory principles, public policy, or established case law.
Calling a charge contractual doesn't protect it if it constitutes an Unfair Trade Practice or an unlawful restraint on property transfer. Courts don't entertain lop sided agreement clauses that force flat owners to pay lakhs just for a basic "No Objection" letter. Applying an unfair policy uniformly to everyone doesn't make it legal.Since you already have possession and the Agreement for Sale is registered, you hold the legal title and physical control. The builder is acting merely as an interim manager until a Cooperative Housing Society (CHS) or Apartment Condominium is formed.
You just assess that if the NOC is really necessary before escalating the matter through legal forum. If your buyer is taking a home loan and the bank refuses to disburse funds without a builder NOC, issue a legal notice to the developer stating that if Gera Developments is willing to accept a nominal processing fee (e.g., ₹10,000) for issuing a 'No Dues Certificate'. If not, you will be forced to take appropriate legal action through and MahaRERA/Consumer Court proceedings."The notice will demand the issuance of a "No Dues / No Objection Certificate" within 7 days upon payment of reasonable administrative charges, citing Supreme Court rulings on unfair builder-buyer agreements.
If your resale deal risks falling through because the buyer's home loan is stuck, you may the demanded amount via Demand Draft / NEFT, you may send an official letter/email prior to or alongside payment stating: "This payment of ₹4,14,000 is being made strictly UNDER PROTEST and WITHOUT PREJUDICE to my legal rights to recover the same."
Once your sale deed is executed and the buyer has disbursed the funds, file a complaint before the District Consumer Disputes Redressal Commission or MahaRERA to recover the entire ₹4.14 lakh along with 12% interest, legal costs, and compensation for mental agony.
Pay strictly "Under Protest", courts routinely grant 100% refunds of forced transfer charges once challenged post-sale.
Please share the subject clause in the agreement which is being referred by the builder to justify imposing of transfer charges
Dear Sir/Madam,
The builder cannot justify the charge merely by referring to the Agreement. An excessive transfer/NOC fee can still be challenged as unfair and arbitrary.
Send a legal notice seeking the exact clause, detailed calculation and legal basis for requiring the NOC. If the builder refuses, approach MahaRERA or the Consumer Commission. If payment is unavoidable to protect the sale, pay only under written protest.
Advocate Saurabh Agrawal
Dear Sir/Madam,
Though the transfer charges are contractual in nature and may differ from builder to builder but the same can't be set arbitrarily by any builder to cause inconvenience to any flat owner. Inclusion of relevant in agreement to sale is also unfair practice and you complain regarding the same to competition commission of Bharat besides complaint to DCDRF.
You need to get the detailed reply drafted from lawyer
