MahaRERA Payment Rules Every Mumbai Flat Buyer Should Use

A Mulund buyer told us that in May 2026 a builder asked for 25 percent of the flat cost as a booking amount before any agreement was signed, calling it a limited period offer. She almost paid, then learned that the law caps that first payment at 10 percent until a registered agreement for sale is in place. She paid the 10 percent, insisted on the registered agreement, and kept the rest of her money safe. That single rule, one of several payment protections under the real estate law, is what stands between a Mumbai buyer and a builder's cash flow problems. Buyers who understand the rule negotiate from a position of information, while those who do not often hand over money that the law never required them to pay so early.

The short answer. Under the real estate law that MahaRERA administers, a builder cannot take more than 10 percent of the flat cost before signing a registered agreement for sale, must route 70 percent of your payments into a dedicated project account, and should link further demands to construction stages. The trade off to understand: these rules protect you only if you use them, so paying large sums early, outside the agreement and against a plain demand letter, quietly signs away the very safeguards the law gives you, often without realising it until a project runs into trouble.

What payment protections does RERA give a Mumbai buyer?

The law gives you three practical protections: a cap on the advance before agreement, a ring fence on how your money is used, and a link between payments and actual construction. Together they are designed to stop the old pattern where buyers paid most of the price upfront and then waited years while their money funded other projects. For a Mumbai buyer, knowing these rules turns a lopsided negotiation into a fairer one, because you can point to the law rather than simply pleading with the sales team. None of these protections require you to go to court. They are conditions the builder is meant to follow from the very first payment, and your job is to hold the transaction to them. It helps to remember that these are not favours a builder grants, they are statutory conditions attached to selling a registered project, and a reputable developer will already be following them. When a seller reacts badly to being asked about the registered account or the payment schedule, that reaction is itself information worth weighing.

What is the 10 percent rule and why does it matter?

The 10 percent rule means a promoter cannot accept more than 10 percent of the cost of the flat as an advance or application fee before a written agreement for sale is signed and registered. This comes from Section 13 of the real estate law, and it is one of the clearest lines a buyer can rely on. If a builder asks for 20 or 25 percent to block a unit before any agreement, that demand crosses the legal line. The protection matters because the registered agreement for sale is the document that records the price, the carpet area, the payment schedule and the possession date, so paying heavily before it exists means paying before your key terms are locked. Pay up to 10 percent to book if you wish, then insist that the registered agreement follows before any further money moves. Treat a mere allotment letter or a booking receipt as a starting point, not as the contract, because they usually do not carry the enforceable detail that a registered agreement for sale does. If a builder wants to delay the registered agreement while collecting more money, that is exactly the situation the 10 percent cap was written to prevent, and it is a moment to slow down rather than speed up. Acting while you still hold most of your money gives you far more leverage than raising a complaint after you have already paid in full.

What is the 70 percent escrow rule?

The law requires a promoter to deposit 70 percent of the amounts collected from buyers for a project into a separate bank account used only for that project's land and construction cost. This ring fencing, drawn from Section 4 of the real estate law, is meant to ensure that the money you pay for your building actually goes into your building, rather than being diverted to a different launch or used to plug a gap elsewhere. As a buyer you will not operate this account, but you can ask whether the project maintains the designated account and can look for the project's financial and progress disclosures on the regulator's portal. The presence of these disclosures is itself a sign that the promoter is engaging with the framework rather than working around it. In practice you can also ask your bank, if you are taking a home loan, since lenders reviewing a project often check these same disclosures and will not fund a project that fails basic compliance. A lender's willingness or refusal to fund a specific project can be a useful second opinion on its standing.

How should my payments be linked to construction stages?

Your payments should be tied to real construction milestones, not to the calendar or to a builder's cash needs. Under the framework the demand for each instalment is expected to follow the progress of the work, for example on completion of the plinth, of specific slabs, of walls and of finishing, as set out in your agreement for sale. This stage linked approach protects you because you pay for work that has actually been done, and it gives you leverage if construction stalls, since your next payment is not due until the next stage is reached. In a market where some projects slow down for months, this link between money and milestones is one of the most practical shields a buyer has. When you read your agreement, check that the payment schedule is expressed against construction stages and not merely against dates, and keep photographs and dated records of site progress so you can match demands to reality. Where a housing society or buyer group already exists for the project, comparing notes with other buyers can also reveal whether demands are being raised fairly across the board. If a demand arrives for a stage that clearly has not been reached on site, you are within your rights to question it before paying. This is far easier when the schedule in your agreement is specific, which is why a vague, date only schedule is worth pushing back on before you sign rather than after.

What are the red flags, and how do the protections line up?

The clearest red flag is any demand for a large payment that is not backed by a registered agreement or by real construction progress. The table below lines up each protection with what the law expects and what it means for you, so you can use it as a quick reference when a demand letter arrives. Keep it alongside your agreement, because the same points come up again each time a fresh instalment falls due.

What should I insist on before paying a booking advance?

Insist that every payment is anchored to the registered agreement and to visible progress, and put your requests in writing. The checklist below keeps your money aligned with your protections.

1. Confirm the project is registered on the regulator's portal and note the registration number.
2. Keep any pre agreement payment within the 10 percent limit set by the law.
3. Ask for the registered agreement for sale before paying beyond that 10 percent.
4. Check that the agreement lists a stage linked payment schedule, not just calendar dates.
5. Match every demand letter to the construction stage it claims has been reached.
6. Pay through traceable banking channels and keep receipts for each instalment.
7. Raise any excess or premature demand in writing and seek advice before paying it.

Frequently asked questions

How much advance can a Mumbai builder take before the agreement?

No more than 10 percent of the flat cost. Under Section 13 of the real estate law, a promoter cannot accept more than 10 percent as an advance or application fee before a written, registered agreement for sale is signed. If a builder demands 20 or 25 percent to block a unit before any agreement, that crosses the legal line.

What is the 70 percent rule in RERA?

It requires a promoter to keep 70 percent of the money collected from buyers in a separate account used only for that project's land and construction. Drawn from Section 4 of the law, it aims to stop your payments being diverted to other launches. You cannot operate the account, but disclosures appear on the regulator's portal.

Should my flat payments be linked to construction stages?

Yes, your agreement should tie each instalment to a construction milestone, such as completion of the plinth or specific slabs, rather than to fixed dates. This protects you because you pay for work that has actually been done, and it gives you leverage to withhold the next payment if construction stalls. Check the schedule in your agreement carefully.

What can I do if a builder demands more than allowed?

Raise the issue in writing first, pointing to the 10 percent cap or the stage linked schedule, and do not pay a premature or excessive demand under pressure. Keep all correspondence and receipts. If the builder persists, you can seek advice and, where needed, approach the regulator, since these payment rules are enforceable buyer protections.

For related reading, see our explainer on the RERA agreement for sale and the 10 percent rule and our guide to verifying a Mumbai project on MahaRERA and reading its disclosures. You can search registered projects and read disclosures on the official MahaRERA portal.

Last updated 2026-09-18. PropNewz Team.