What percentage is this?
Work out what this payment, plus everything already paid, comes to as a share of the agreement value. If it crosses 10%, ask why.
Field note · buyer protection
The 10% rule: what a developer can take before the agreement
Advance, application fee, “booking amount”: whatever the receipt calls it, the law caps how much a developer may accept before a written agreement for sale is signed and registered.
The short version. Under Section 13 of RERA, a promoter cannot accept more than 10% of the cost of the apartment without first entering into a written agreement for sale and registering it. On a ₹1.2 crore flat, that is ₹12 lakh. Anything beyond it comes after registration.
The statute
What Section 13 says
A promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force.
Why the agreement matters
The cap exists because the agreement is what protects you. Section 13(2) requires it to set out the specifications and the development works promised, the payment schedule, the date of possession, and the interest each side pays if the other defaults.
A booking letter usually fixes none of those. It records that you paid, and very little about what you are owed in return. The longer money moves before the agreement is registered, the more of your price is sitting on a two-page letter.
The pressure tends to peak in festive seasons. The offer ends “this weekend”, the booking form is short, and the next instalment is requested before anyone mentions the sub-registrar’s office.
A tested case
Maharashtra’s appellate tribunal has backed buyers on this
MahaREAT, reported 2024
In a case reported by LiveLaw in April 2024, buyers had paid ₹16,20,869 against a flat priced at ₹52,01,000, about 31% of the price, with no agreement for sale executed. The developer demanded further payments, then terminated the allotment for non-payment.
The Maharashtra Real Estate Appellate Tribunal held both the demand and the termination illegal, and the buyers were entitled to a refund with interest.
The tribunal also relied on Section 4 of the Maharashtra Ownership Flats Act, which sets its own limit on payments before an agreement. The point for a buyer is the same under either law: the agreement should come before the money, not after it.
Before you pay
Three questions to ask in writing
When is the agreement registered?
Get a date. Ask for the draft agreement now, so you can read the payment schedule, possession date and default interest before it is final.
What if I walk away first?
Ask what happens to the booking amount if you withdraw before registration, and get the answer on the receipt or in a letter.
This note explains a statutory provision and a reported case. It is not legal advice. Read the draft agreement with your own advocate before registration. The project’s MahaRERA page will tell you whether the possession date in the agreement matches what the developer filed: see what a MahaRERA number proves.
Questions
Common questions about the booking amount
How much booking amount can a builder take under RERA?
No more than 10% of the cost of the apartment before a written agreement for sale is signed and registered, under Section 13(1) of RERA. The label on the receipt, whether advance, application fee or booking amount, does not change the limit.
What must the agreement for sale contain?
Section 13(2) requires it to set out the specifications and development works, the dates and manner of payment, the date of possession, and the interest payable on default by either side.
What if a developer has already taken more than 10%?
Ask for the agreement to be registered before paying anything further. In a case reported in 2024, MahaREAT held a developer’s further demand and its termination of the allotment illegal where about 31% had been paid without an agreement, and the buyers were entitled to a refund with interest. Take legal advice on your own facts.
Asked for more before the agreement?
Send me the booking form and the payment demand. I’ll tell you where you stand before you pay the next instalment.