Assignment Transfers in Under-Construction Projects: Step-by-Step with Fees

Key Takeaways

• Assignment transfers let an existing buyer in an under construction project pass on their rights and obligations to a new buyer before possession.
• They require a builder NOC, an assignment agreement, and verification of all original documents such as the allotment letter and payment receipts.
• Transfer charges usually range between two and five percent of the property value, and GST may apply depending on the stage of construction.
• The process takes about four to six weeks and involves coordination between the assignor, assignee, builder, and sometimes banks if loans are involved.
• Common risks include pending dues, incomplete paperwork, unclear GST treatment, and delayed builder approvals.
• Negotiation skills matter. Costs can be reduced or adjusted fairly when all parties are transparent and aligned.
• BrickFi helps simplify assignment transfers by providing builder credibility checks, compliance reviews, and data-backed guidance, reducing stress for both buyers and sellers.

What an Assignment Transfer Really Means

Assignment transfers are common in high-demand cities like Bangalore, Pune, or Gurgaon where property values often rise during construction. Instead of waiting years for possession, the original buyer may decide to transfer their allotment to someone else, either to capture gains or to exit due to personal reasons.

For the new buyer, this is an opportunity to step into a project mid-way, often at a better price compared to new bookings, or to secure a home in a sold-out project. For the builder, assignment transfers ensure the project continues smoothly without disruption in instalment flows.

In essence, it is a three-party transaction: the assignor (original buyer), the assignee (new buyer), and the builder. Each has interests to protect, which is why understanding the rules and responsibilities is crucial.

Why Buyers and Sellers Opt for Assignment Transfers

Life events are the most common reason for assignment transfers. A job transfer abroad, children’s education needs, or an unexpected financial burden can push an allottee to exit early. Others use it as a financial strategy. If a property has appreciated 20 percent during the construction phase, exiting mid-way helps lock in profit without waiting for possession.

On the other side, assignees often look for deals that are priced better than fresh launches. Sometimes developers raise base prices during later phases, and assignment transfers become a cheaper entry point. In other cases, buyers simply want to secure a home in a popular project that is already fully sold out.

Mandatory Permissions and Documents

The most important step is the builder’s No Objection Certificate. Without the builder’s NOC, the assignment transfer cannot proceed. Builders issue the NOC once they are satisfied that all dues are cleared, no instalments are pending, and the project terms allow such a transfer.

The assignment agreement is the next pillar. This legal document captures the transfer of rights and obligations from the assignor to the assignee. It outlines the consideration paid, the balance instalments, the handover of original documents, and the acceptance of terms by all parties.

Other essential documents include the original allotment letter, the agreement to sell signed between builder and original buyer, and all payment receipts issued so far. The assignee must carefully verify these to ensure there are no hidden liabilities. Updated KYC of the new buyer is also mandatory for builder records and banking compliance.

Fees and Charges to Factor In

Assignment transfers always involve costs. Builders charge transfer fees, sometimes called assignment or substitution fees, which can range between two and five percent of the property value or the consideration amount. This is a significant cost and must be factored into negotiations.

GST is another area where buyers often stumble. Under construction property is subject to GST until a defined stage of completion. If the project has not crossed this threshold, the assignment transfer may attract GST on the transfer consideration. Misunderstanding these rules can lead to double taxation or disputes later.

Other costs include stamp duty on the assignment agreement if applicable in the state, documentation charges, and administrative fees for updating builder records. While these may look like small line items, together they can materially change the total cost of transfer.

Timelines and How Long the Process Takes

The average assignment transfer in India takes four to six weeks. The sequence usually looks like this. First, the assignor requests a builder NOC and clears any pending dues. Next, the assignment agreement is drafted and signed by all parties. After this, transfer fees and GST are paid, followed by submission of documents to the builder and lender if a loan is involved. Finally, the builder updates its records to reflect the new allottee.

Delays happen mainly when instalments are pending, documents are incomplete, or if the builder is slow in issuing the NOC. Buyers and sellers should always plan for some buffer time rather than assuming an instant transfer.

Negotiating Assignment Transfers Smartly

Because assignment transfers involve three different parties, aligning interests is critical. When negotiating with the builder, clarity helps: explain that dues are settled, documents are in order, and the NOC is only procedural. This usually motivates builders to act faster.

With the assignor, the focus is on pricing. Since the assignee will bear transfer charges and GST, it is fair to ask for adjustments in the final settlement. For the assignee, transparency is key. Provide them with receipts and proof of payments made so far, and agree on a clear schedule for the balance.

Negotiation is not just about lowering costs but about ensuring fairness so that no party feels shortchanged. BrickFi often supports buyers and sellers with data-driven benchmarks and templates that help keep the process professional and efficient.

Pitfalls That First-Time Buyers Miss

The most common mistake is assuming the builder will approve without conditions. Some agreements restrict transfers during early stages, and ignoring these clauses can result in rejection.

Another pitfall is ignoring pending dues. If the assignor has missed an instalment, the builder may not issue an NOC until it is paid, shifting liability to the assignee. GST compliance is another area where mistakes happen, leading to tax notices later.

Many first-time buyers also rely on verbal commitments instead of properly executed agreements. In real estate, only written contracts and receipts protect your interests. Some even try to avoid official transfer charges by paying off the record, but this leaves both parties vulnerable if disputes arise.

What About Loans and Bank Approvals

If the property is already under a loan, the lender’s approval is required. Banks may either allow substitution of the borrower or ask for loan closure before transfer. This step can add time to the process.

Assignees must always demand a loan clearance certificate if the assignor had a loan. Otherwise, hidden liabilities may get passed on. Coordination between the builder and the bank is essential to ensure smooth transfer of payment schedules and disbursements.

Why BrickFi Matters in Assignment Transfers

Assignment transfers combine property law, taxation, builder approvals, and negotiation. For someone doing this for the first time, the process can feel overwhelming. BrickFi makes the journey easier by using BrickFi360 reports to check builder credibility and approval status, by highlighting hidden costs like transfer charges and GST early, and by creating structured due diligence checklists that buyers can follow step by step.

Because the transaction involves negotiation between three parties, BrickFi also brings data-backed insights into what is fair and reasonable. Instead of relying on guesswork, both assignors and assignees can lean on credible information to strike better deals.

Assignment Transfers in Under Construction Projects: What Buyers Should Remember

Assignment transfers may look intimidating, but they are manageable if handled with the right process. Sellers should clear all dues before initiating, buyers should verify every document, and both must understand the impact of fees and taxes. Timelines are not instant, so patience and planning are necessary.

Most importantly, do not assume that assignment transfers are routine paperwork. Each builder has different rules, each project has unique clauses, and each transfer carries financial implications. One wrong step can mean additional cost or legal disputes.

For those considering assignment transfers in under construction projects, data and clarity are your best allies. BrickFi helps you cut through complexity with builder credibility checks, cost visibility, and advisory support that makes the transfer smoother for both sides. When your property decision involves lakhs or crores, it makes sense to choose insight over guesswork.

FAQs

What is the main difference between an assignment transfer and a resale?

Resale happens after possession when the property is registered in the buyer’s name. Assignment transfer happens during construction, before possession, when rights are passed to a new buyer.

How much are the transfer charges usually?

Builders typically charge between two and five percent of the property’s agreement value as transfer fees. This varies by project and builder policy.

Does GST always apply on assignment transfers ?

GST applies if the property is still under construction and not classified as complete under GST rules. Buyers should consult a tax advisor for clarity.

Can a builder refuse an assignment transfer?

Yes, if dues are pending, if the original agreement prohibits early transfers, or if project policies restrict multiple assignments. Always review your agreement to sell carefully.

What happens if there is a home loan on the property?

The lender’s approval is required. Either the loan is closed before transfer, or the bank substitutes the new buyer. Without this, liabilities may get transferred unknowingly.