What is allotment letter?
Also called: booking confirmation, allotment
Once you've paid the booking amount, the developer issues an allotment letter confirming which unit is yours, at what price and on what payment schedule. It comes before the registered agreement for sale and isn't a title document.
Pay a booking amount on a new project and, within a few days or weeks, you should receive an allotment letter. It identifies the tower, floor and unit number, the carpet area, the total consideration and how that splits across instalments, and it usually attaches the payment plan and a cost sheet. It's the first paper that ties a particular flat to your name.
On its own it isn't the contract. Section 13 of RERA stops the developer from collecting more than 10% of the price until the agreement for sale is signed and registered, so the allotment letter covers the window between booking and that agreement. Banks accept it, together with the cost sheet, to issue an in-principle loan sanction.
MahaRERA went further in 2023 by prescribing a model allotment letter, after buyers complained that developers were using the letter to lock in heavy cancellation deductions before any registered agreement existed. The format requires the RERA registration number, the RERA carpet area and the refund terms on cancellation to be stated up front. Not every state has a prescribed format, so outside Maharashtra read the cancellation paragraph with particular care.
Keep the original somewhere safe. If you sell an under-construction flat before possession, the builder endorses the allotment in the new buyer's name against a transfer fee, and a missing original makes that endorsement slow and expensive.
A buyer who books a 2 BHK in Hinjewadi, Pune for ₹78 lakh with a ₹2 lakh cheque should get an allotment letter showing, say, flat 1204, 690 sq ft RERA carpet area and the schedule for the remaining ₹76 lakh. The developer can then collect up to ₹7.8 lakh before the agreement for sale must be registered.
Paying 20 or 30% against just an allotment letter because the builder offers a discount for early money. That sum sits outside any registered contract, so insist on the agreement for sale before you cross 10%.
Questions people ask about allotment letter
Can a builder cancel my allotment?
Only on the terms in the allotment letter or agreement, usually repeated payment default after written notice. RERA authorities have ordered refunds where builders cancelled without proper notice or deducted more than the agreed amount.
Is stamp duty payable on an allotment letter?
Usually not, because it doesn't transfer anything. Duty is paid on the registered agreement for sale or the sale deed, depending on the state.