For a transaction governed by RERA, the promoter cannot accept more than ten percent of the apartment, plot or building cost as an advance or application fee without first entering into and registering the agreement for sale. A demand for twenty percent before registration should therefore be answered by asking for the agreement and a compliant payment sequence. Paying an advance before registered agreement is not made lawful merely by calling the second instalment a confirmation amount.
Part of the RERA and homebuyer disputes practice at S Jain & Attorneys, Bangalore.
Reply in writing with the agreed cost, amounts already paid and the proposed additional demand. Ask for the draft agreement, registration arrangements and the legal basis for any claim that the restriction does not apply. Preserve the booking form and demand message before the sales team changes the description of the payment.
How does the ten-percent cap apply to several small payments?
Look at the cumulative sum accepted as advance or application fee for the unit, not just the latest instalment. If you already paid a booking amount and a reservation amount, the next request must be considered with those payments. Splitting a demand into several labels does not answer the statutory question.
Section 13(1) refers to the cost of the apartment, plot or building. Obtain the agreed price sheet and identify what the promoter says is included. Do not invent a universal calculation for taxes, statutory payments or separately contracted services without examining the actual transaction. A disputed cost base should be put to the promoter in writing and reviewed before further payment.
The rule says more than ten percent. It does not say that a promoter is entitled to collect ten percent from every buyer, or that paying up to that amount is financially safe. The booking terms, project status and due diligence still matter. The statutory ceiling is a protection against excessive collection before a registered agreement, not a certificate of value or title.
A simple ledger is enough to expose the immediate issue. Show the total stated cost, each payment date and amount, and the cumulative percentage after the new demand. Attach receipts and the bank trail. If the promoter disputes a payment's character, ask for the invoice and contractual basis it relies on.
Key takeaway. Calculate the total already accepted before deciding whether the next demand crosses the cap. A new label on the receipt does not by itself create a new legal category.
| Payment request | Question to ask | Useful evidence |
|---|---|---|
| Booking plus confirmation amount | Does the cumulative advance exceed tenpercent? | Receipts and price sheet |
| Agreement preparation charge | What service or statutory payment is this actually for? | Invoice, clause and payee |
| Balance before registration appointment | Why is collection required before the agreement is registered? | Draft agreement and proposed sequence |
| Cash payment to salesperson | Who is receiving it and how will it be credited? | Authorised payment instructions |
| Refundable expression of interest | What rights and refund terms does the document create? | Complete signed form and correspondence |
Does signing an unregistered agreement satisfy section 13?
No. The provision requires a written agreement for sale and its registration before the promoter accepts more than the specified amount. A signature page, a notarised booking form or a promise to register later is not the same thing as registration of the agreement.
Ask for the complete document, including schedules, specifications, payment stages and possession date. Section 13(2) requires the agreement to address development particulars, payment dates and manner, possession and applicable interest arrangements, alongside prescribed particulars. A document with essential schedules left blank should not be treated as ready merely because a signature slot has been created.
State rules prescribe the applicable agreement framework. For a Karnataka project, check the current Karnataka rules and applicable agreement form, including amendments relevant to the transaction. Do not use a template from another State without checking it. The central cap and the State's document requirements work together.
Registration also does not settle every substantive issue. A registered agreement can still contain a disputed clause or be inconsistent with mandatory law. Review it before signing. The purpose of insisting on the document is to know the bargain, not simply to obtain a registration number after making the payment.
The immediate response should separate payment, document and registration questions.
Add all advances
Compare cumulative payments with the stated unit cost. Keep the booking, reservation and confirmation receipts together instead of treating them as unrelated sums.
Read the whole agreement
Check schedules, specifications, payment stages and possession terms. A signed page with missing attachments does not explain the complete bargain.
Fix the sequence
Ask for execution and registration arrangements before any collection exceeding the statutory limit. Record the promoter's proposed steps in writing.
What should I write when the builder threatens to give my flat to someone else?
State that you remain willing to follow a lawful payment and registration process, then identify the demand you dispute. Avoid an ambiguous message saying you are cancelling if you want to retain the booking. The remedy and factual record differ between a buyer seeking performance and one choosing to withdraw.
A practical response can say: "I have paid[amount] against the stated unit cost of[amount]. The additional demand would take the advance to[percentage] before registration. Please provide the complete agreement for sale and arrange its execution and registration before seeking a collection beyond section 13(1). I have not requested cancellation of my allotment."
Use your actual figures and remove any sentence that does not match your intention. If the promoter threatens cancellation, preserve the notice and the contractual clause cited. Do not assume that a dispute over an unlawful demand excuses every separate payment obligation or permits silence in response to a formal notice.
The immediate legal objective may be to restrain cancellation pending a decision or to direct a compliant agreement process. Section 36 gives the Authority an interim-restraint power where its conditions are satisfied, and section 37 provides direction powers. Such relief requires a proper application and evidence. A complaint acknowledgement alone does not stop the promoter from taking a disputed step.
What if I already paid twenty percent and no agreement was registered?
Collect the payment evidence and ask for the registered agreement or an explanation of its absence. The fact that payment has already been made does not make the statutory issue disappear. But it also does not automatically decide whether you are entitled to cancel, receive a particular interest rate or recover a particular penalty.
Identify the relief you want. A buyer who still wants the flat may seek the agreement and compliance. A buyer who wants to exit needs the legal and contractual basis for refund examined. Section 13 is a collection restriction. It should not be rewritten as a universal no-questions-asked cancellation provision for every booking.
Check whether a later agreement has been offered and what it says about the earlier payments. The document should accurately credit them. Do not sign a false receipt date or a statement that no money was collected earlier if your bank records show otherwise. Backdating can obscure the very breach you may need to establish.
If the promoter proposes a refund only in exchange for a full discharge, read the release and payment sequence. Confirm the amount, deductions, interest if agreed and payment date. A refund promise does not become repayment until the money is received, and a signed release may create a dispute even if the promised transfer later fails.
For the separate question of forfeiture after an actual cancellation, use the guide on the builder cancelling an allotment. This page addresses the earlier decision: how to respond to the payment demand and obtain a compliant agreement before the dispute becomes a cancellation case.
Common mistake. Do not describe an objection to the demand as cancellation unless you intend to cancel. A short, inaccurate message can change the dispute the documents appear to show.
Can the promoter collect through an agent or a different group company?
Ask who is authorised to receive the money and how it will be credited to your unit. A payment request from a salesperson's personal account or a different company requires explanation. The agreement, demand and receipt should identify the legal recipient and basis of collection.
Section 13 addresses acceptance by the promoter. Where the transaction is routed through an agent or another entity, the actual arrangement must be examined. Do not assume that changing the bank account automatically avoids the restriction, and do not assume every payment to another service provider is necessarily part of the unit advance. The facts and documents decide that question.
Keep the authority letter, invoice, bank account details and written confirmation of credit. If the promoter later denies receiving the payment, those records become central. Avoid cash or informal transfers that leave no reliable link between the payment and the booking.
An agent's registration is a separate issue from the promoter's agreement duty. A registered agent cannot turn an unlawful collection sequence into a lawful one by saying it is usual practice. Ask the promoter itself to confirm the demand and the registration arrangements in writing.
Where do I complain, and what should the complaint ask for?
For a RERA-governed project, section 31 provides the complaint route before the relevant Authority or adjudicating officer according to the relief. A section 13 compliance complaint should identify the project, promoter, cost, payments, absence of registration and the exact direction sought. State forms and current filing directions need to be followed.
Possible requests should be tied to the facts: production of the agreement, a direction concerning unlawful collection, clarification of the ledger or interim protection against a threatened act. Do not copy a long list of penalties and damages from another buyer's case. The Authority's regulatory penalty, if imposed, is not automatically money payable to you.
If you seek compensation, the forum allocation matters. The Supreme Court in Newtech Promoters explains the adjudicating officer's role for compensation under the specified RERA provisions. A refund claim and a compensation claim should not be casually combined under the assumption that one label gives one officer every power.
Attach a short chronology and a calculation table. Include the booking form, price sheet, payment proof, draft agreement if supplied, registration communications and cancellation threat if any. A reader of the complaint should be able to see the disputed sequence without listening to every sales conversation you had.
Keep the requested relief clear enough to monitor after an order.
Choose the outcome
State whether you want the booking preserved and the agreement registered or whether you seek withdrawal on an identified basis. Avoid contradictory instructions.
Prove the sequence
Place payment dates beside the agreement and registration dates. The chronology is central to a complaint about collection before registration.
Read the relief
Compliance, refund, compensation and regulatory penalty are different requests. Use the correct forum and do not promise that a penalty becomes your refund.
What should I do before the next payment deadline?
Send the factual response before the deadline and obtain advice if cancellation is threatened. Silence makes it easier for the promoter to describe the problem simply as buyer default. A clear response records both your objection and your willingness to proceed on lawful terms.
- Confirm the project and promoter identity and whether RERA applies.
- Reconcile every payment against the stated cost.
- Obtain and review the complete agreement and applicable State form.
- Request execution and registration before an excess advance is accepted.
- Preserve any threat, disputed deduction or proposed backdating.
- Seek appropriate complaint or interim relief where the dispute remains live.
The useful legal analysis is about sequence and intention. What money was accepted, when was the agreement registered, and did the buyer ask to continue or to cancel? A file that answers those questions is more persuasive than a generic allegation that the builder cheated everyone. It also helps resolve the matter without accidentally abandoning the unit you still want.
Frequently Asked Questions
Can the promoter take exactly tenpercent without registration?
Section 13(1) prohibits more than tenpercent before the written agreement is entered and registered. That ceiling does not make any particular booking safe or compel you to pay it.
Does notarising the booking form count as registration?
No. Notarisation and registration of the agreement for sale are different acts.
Can several small advances be assessed separately?
The cumulative acceptance for the unit matters. Ask for the legal basis of any claimed exclusion rather than relying on labels.
Does a section 13 breach automatically cancel the booking?
No. Identify whether you seek compliance or withdrawal and the legal basis for the relief.
Should I stop replying to payment demands?
No. Record the disputed demand, your figures and your intended outcome. Obtain advice on formal notices and urgent protection.
Can the penalty be paid directly to me?
A regulatory penalty is not automatically a refund or compensation award to the buyer.
What if I already paid too much?
Preserve the payment chronology and seek the appropriate relief. Do not sign false dates or an inaccurate ledger.
Is the same agreement form used in every State?
No. Check the applicable State rules and current form for the project.
This article is for general informational purposes only and does not constitute legal advice. Consult a qualified advocate for advice on your specific situation.
