A Bengaluru buyer was thrilled to book a flat in Electronic City, until the sales desk asked for 30 percent of the price upfront just to hold the unit, with the formal agreement to follow much later. It felt like the normal way things were done, and he almost paid. In fact the demand broke a clear rule. Under the real estate law known as RERA, a builder cannot take more than 10 percent of the cost before signing a proper registered agreement with you. That agreement is not a formality to be pushed to the end. It is the document that pins down what you are buying, when, and on what terms.

The short answer. Under Section 13 of RERA, a promoter cannot accept more than 10 percent of the cost of the home as an advance or booking amount without first entering into a written agreement for sale and registering it. That agreement must set out the key terms, including the carpet area, the possession date, the payment schedule tied to construction, and the interest each side pays on default. The trade off for a buyer is patience over pressure. Rather than paying a large sum on trust, you get the terms in writing and registered before you are more than 10 percent committed.

This protection sits in Section 13 of the Real Estate (Regulation and Development) Act 2016, as legal explainers such as IntoLegalWorld set out. Here is what a Bengaluru buyer should expect and check.

What is the RERA agreement for sale?

The agreement for sale is the written, registered contract between you and the builder that records the terms of your purchase before the sale deed. It is distinct from the final sale deed that transfers ownership at the end. The agreement for sale comes earlier, at the booking stage, and sets out what the builder is committing to build and hand over, and what you are committing to pay and when. RERA gives this agreement teeth by requiring it to be in place, and registered, before the builder can take more than a small advance from you.

Because it fixes the core terms early, the agreement for sale is one of the most important documents a buyer signs. Reading it closely, rather than skimming it after paying, is where a careful purchase begins.

It also helps to see where this sits in the sequence of a purchase. The agreement for sale records the deal and its terms at the booking stage, while the registered sale deed later actually transfers ownership once the home is ready and paid for. Both are registered documents, but they do different jobs, and a buyer should not treat one as a substitute for the other. The agreement protects your terms on the way to the sale, and the sale deed makes you the owner at the end of it, so both deserve the same careful reading.

Why can a builder not take more than 10 percent first?

A builder cannot take more than 10 percent first because Section 13 sets an absolute ceiling to protect buyers from paying large sums on nothing more than a brochure. The law prohibits a promoter from accepting any amount exceeding 10 percent of the cost of the apartment as an advance or application fee before a written agreement for sale is signed and registered. This is a mandatory requirement, described as an absolute statutory ceiling, not a guideline that can be waived by a form or a verbal understanding. The point is to ensure your money is committed only once the terms are documented and enforceable.

So a demand for 20 or 30 percent just to book, with the agreement promised later, is not standard practice but a breach of the rule. Recognising this protects a Bengaluru buyer from over committing early in a way that is hard to unwind.

What must the agreement for sale contain?

The agreement for sale must contain the key commercial and delivery terms, not just generic clauses. Under RERA it has to specify the particulars of the project and its specifications, the payment schedule setting out how and when you pay the balance as construction progresses, the date by which possession will be handed over, and the rates of interest payable by the promoter to you and by you to the promoter in case of default. It must also disclose the carpet area, so the size you are paying for is fixed in writing. The table below lists the clauses worth checking most closely.

Which clauses should a buyer check most closely?

Check the carpet area, the possession date, and the payment schedule first, because these decide what you get, when, and how you pay. The carpet area is the defined usable size, and it should match the brochure and the RERA registration, as our guide to RERA carpet area explains. The possession date is the commitment against which any delay is measured, which feeds directly into your remedies if the builder is late, covered in our guide to what RERA lets you do about a delayed possession. The payment schedule should tie your money to construction milestones rather than to the calendar, so you are not paying far ahead of the work.

Also look closely at the default interest clause. RERA intends the rate a buyer pays for a late payment to match the rate the builder pays for a late possession, so an agreement that penalises you heavily while letting the builder off lightly is out of step with the law. A lopsided clause is worth questioning before you sign.

What if a builder asks for more before the agreement?

If a builder asks for more than 10 percent before signing and registering the agreement, that demand is not permitted, and you are within your rights to refuse. A promoter who breaches this can face regulatory action from the state RERA authority, and can be required to refund the excess with interest. For a buyer, the safe response is to insist that the agreement for sale be signed and registered before you cross the 10 percent mark, rather than paying a large booking amount on the promise of paperwork later. If a builder resists that, it is a signal worth heeding about how the rest of the project may be run.

None of this means a booking cannot proceed, only that it must proceed in the right order. Pay up to 10 percent to book if you wish, then get the agreement in place before anything more changes hands.

How should a Bengaluru buyer use this?

Use it to slow the process down to a safe order and to read the agreement before you are heavily committed. When a sales team pushes for a large upfront payment, treat the 10 percent rule as your anchor and ask for the registered agreement for sale first. For a project such as Abhee E-City in Electronic City, that means confirming the carpet area, possession date, and payment schedule in the agreement before you pay beyond the booking amount. A well run developer will have no difficulty putting these terms in a proper agreement, since RERA requires them anyway.

The habit that protects buyers is simple. Let the document, not the sales pressure, set the pace, and make sure every number that matters, from the size to the possession date to the payment plan, is written into the agreement you sign.

What should you check before you pay beyond the booking amount?

Run through these seven steps so your booking follows the order the law intends.

1. Do not pay more than 10 percent of the cost before a registered agreement for sale.
2. Insist on a written agreement for sale, registered, before crossing that limit.
3. Check that the carpet area in the agreement matches the brochure and RERA record.
4. Confirm the possession date is clearly stated, since your delay rights rest on it.
5. Read the payment schedule and see that it is tied to construction milestones.
6. Check the default interest clause applies the same rate to both sides.
7. Question any demand for a large advance before the agreement is signed and registered.

How much advance can a builder take before the agreement for sale?

No more than 10 percent of the cost of the apartment, plot, or building. Under Section 13 of RERA, a promoter cannot accept an advance or application fee exceeding 10 percent before signing a written agreement for sale and registering it. This is a mandatory ceiling, so a demand for a larger booking amount before the agreement is not permitted and can be refused.

What must a RERA agreement for sale include?

It must include the project details and specifications, the payment schedule tied to construction, the possession date, the carpet area, and the interest each side pays on default. These are required by RERA so that the key commercial and delivery terms are fixed in writing before you are heavily committed, rather than left to a later document or a verbal understanding.

Should the penalty interest be the same for the buyer and the builder?

Yes, RERA intends the rate to be equal both ways. The interest a buyer pays for a late payment is meant to match the interest a builder pays for a late possession. If your agreement penalises you at a higher rate than it penalises the builder, that is out of step with the law and worth raising before you sign the agreement.

What can I do if a builder demands more than 10 percent upfront?

You can refuse and insist on the registered agreement for sale first. A builder who takes more than 10 percent before the agreement breaches Section 13 and can face action from the state RERA authority, including a direction to refund the excess with interest. Treat such a demand as a warning sign about how the project may be managed.

Last updated 2026-07-20. PropNewz Team.