Why an NCNDA matters before you share a deal in India

An NCNDA, or Non-Circumvention Non-Disclosure Agreement, matters because Indian real estate lacks a centralised broker registry or mandated commission structures, leaving intermediaries legally exposed the moment they share a deal. Unlike residential brokerage where MLS systems and RERA registration provide some protection, commercial and land transactions above ₹50 Cr operate on relationships and proprietary access. Without a signed NCNDA, a capital allocator or landowner can legally engage directly with parties you introduced, owing you nothing. This is not theoretical. It happens routinely, and the intermediary has no recourse unless the agreement was in place before the introduction.

The legal landscape for intermediary protection

Indian contract law recognises NCNDAs as valid commercial agreements under the Indian Contract Act, 1872. The Bombay High Court in 2019 and Delhi High Court in 2021 both ruled in favour of intermediaries who could demonstrate clear documentation of their role in introducing parties, provided the NCNDA specified the transaction scope and fee structure. However, courts have also dismissed claims where the NCNDA was vague or signed after introductions had already occurred. The key precedent: the agreement must predate the disclosure. RERA, which governs residential transactions through state-level registration, does not extend meaningful protection to land deals, hospital leases, or hotel M&A. The Real Estate (Regulation and Development) Act, 2016, as administered by state RERA authorities, covers only residential projects and certain commercial developments that include residential components. For the asset classes where AIS operates, the NCNDA is the only enforceable protection.

Why circumvention is common in Indian real estate

The commercial incentive to circumvent is straightforward. On a ₹200 Cr land transaction, a 1.5 percent intermediary fee represents ₹3 Cr. If a principal believes they can close directly, that sum becomes compelling. Industry practitioners estimate circumvention attempts occur in 15 to 20 percent of intermediated transactions above ₹50 Cr, based on aggregated feedback from members of the Confederation of Real Estate Developers' Associations of India (CREDAI) and the National Real Estate Development Council (NAREDCO). The problem intensifies with longer deal cycles. A hospital land lease might take 18 months to close. During that period, the buyer and seller have multiple interactions, often without the intermediary present. Without contractual protection, the relationship you created becomes the vehicle for your exclusion. Cross-border transactions add complexity. When an NRI or foreign fund is the capital source, Indian law applies to the NCNDA only if the agreement specifies Indian jurisdiction. Otherwise, enforceability depends on the counterparty's home jurisdiction.

What a defensible NCNDA must include

A functional NCNDA for Indian real estate should include five elements. First, identification of all disclosed parties by legal name and registration details, not just descriptions like 'a hospital group in Hyderabad.' Second, a clear definition of the protected transaction, including asset type, location, and approximate deal size. Third, a duration clause, typically 24 to 36 months from the date of introduction, covering the likely deal cycle. Fourth, a fee structure clause stating the intermediary's commission as a percentage or fixed amount, payable by which party, and at what transaction stage. Fifth, a liquidated damages clause specifying the remedy for breach, typically the full commission amount plus legal costs. Courts have shown greater willingness to enforce agreements that include liquidated damages because they demonstrate both parties understood the commercial stakes. Stamp duty applies to NCNDAs in most Indian states. In Maharashtra, the duty is ₹500 for agreements below ₹25 lakh in value and 0.1 percent of stated consideration above that threshold, according to the Maharashtra Stamp Act Schedule I.

What this means for capital allocators

For family offices and institutional investors evaluating off-market real assets in India, the NCNDA represents a signal of professionalism. An intermediary who insists on signed documentation before sharing a mandate is protecting their access, yes, but also demonstrating that the deal flow is genuine and the parties are real. At AIS, we execute NCNDAs before any material disclosure. This protects our network of principals and counterparties equally. If you are being asked to sign one, it means you are being offered access to a verified mandate. If you are not being asked, the intermediary either lacks the documentation discipline to protect real deals or the mandate itself may not withstand scrutiny. The agreement costs nothing but a few minutes of legal review. The absence of one can cost you the deal or, worse, your reputation for direct dealing in a market that runs on relationships.