The 10 Percent Booking Rule: What RERA Section 13 Means for Bengaluru Flat Buyers
MoHUA's RERA FAQ says Section 13 bars a promoter from accepting more than 10% of the flat or plot cost as advance or application fees before executing an Agreement for Sale. The State sets the agreement's form through Rules; it binds both sides and cannot be contrary to the Act.
A booking in a new Bengaluru project can move quickly: a site visit on Saturday, a cheque for a booking amount on Sunday, and a request for a further payment a few weeks later, possibly before the buyer has seen a draft agreement. The Real Estate (Regulation and Development) Act, 2016 puts a ceiling on how much money can change hands before the paperwork catches up.
The Ministry of Housing and Urban Affairs restates that ceiling in its July 2025 FAQs on the Act, along with what the agreement for sale must be and how far it can depart from the Act. For a buyer in the early stage of a purchase, these two answers set the order of events: agreement first, larger payments after.
The short answer. MoHUA's FAQ says "Section 13 provides that the promoter cannot accept more than 10% of the apartment / plot cost as an advance payment / application fees without first executing an Agreement for Sale with the allottee." The form of the agreement is specified by the State through Rules, it "is binding on the parties," and while "internal flexibility could be provided," its terms "cannot be contrary to the provisions of Act and Rules thereto." The trade-off: the 10% cap limits a buyer's exposure before the contract, but once the agreement is signed, the buyer is bound by its payment schedule, so the draft deserves close reading before signing.
How much can a promoter collect before the agreement for sale?
Not more than 10% of the cost. The FAQ states: "Section 13 provides that the promoter cannot accept more than 10% of the apartment / plot cost as an advance payment / application fees without first executing an Agreement for Sale with the allottee."
Two details matter. The cap covers both "advance payment" and "application fees," so both kinds of payment are counted. And the cap is measured against "the apartment / plot cost." A Bengaluru buyer should add up every payment made before the agreement, including any booking amount and application fee, and compare the total with 10% of the cost stated by the promoter.
A booking also presupposes a registered project. The FAQ says that under Section 3(1), "the promoter is required to register its project with the respective Real Estate Regulatory Authority before any advertising, marketing, booking, selling, offering for sale, or inviting persons to purchase in the project." Before handing over even a booking cheque, a Bengaluru buyer can check the project's registration on the Karnataka regulator's website. Our guide to verifying a RERA registration explains how.
Money paid at booking is also money received from an allottee. The FAQ says Section 4(2)(l)(D) requires the promoter to maintain "a separate bank account for every project undertaken by him wherein seventy percent of the money received from the allottees shall be deposited for the purposes of construction and land cost." Asking which account the booking amount goes into is a reasonable question at the first payment.
What is the agreement for sale, and who decides its form?
The State specifies it through Rules. The FAQ says: "As per section 13(2) of RERA, the Appropriate Government is required to specify through Rules the Agreement for Sale to be entered into between the promoter and the allottee." For a Bengaluru project, the appropriate Government is the State Government, since the FAQ says that "for the State" it is "the State Government."
The FAQ then says "This Agreement is binding on the parties, however, internal flexibility could be provided in the said Agreement for Sale, for determination / insertion of other provisions as decided between the parties." The format sets the base; additional terms can be added by agreement.
Can the agreement override RERA?
No. The FAQ is direct: "the terms of aforesaid Agreement for Sale cannot be contrary to the provisions of Act and Rules thereto." Flexibility exists for other provisions, but not to contract out of the Act.
This matters when a draft contains clauses that seem to dilute a buyer's statutory rights. For example, the FAQ says the rate of interest payable by the promoter and the allottee "shall be the same" under the Explanation to Section 2(za), with the rate specified in the Rules. A clause setting a much higher rate for the buyer's late payment than for the promoter's delay would sit uneasily with that answer. A buyer who finds such clauses should raise them in writing before signing and take legal advice.
The brochure and messages that led to the booking also count. The FAQ says that under Section 2(b), "any medium adopted in soliciting for sale, including SMS and emails, is covered under the definition of advertisement," and that under Section 12 "the promoter is responsible for the veracity of all information contained in the advertisement and the prospectus." If the draft agreement describes the flat or amenities differently from the brochure, ask which version the promoter stands behind before signing.
Bookings can change hands, too. The FAQ says that under Section 2(d) an allottee "includes a person who acquires the said apartment / plot through transfer or sale." A buyer taking over someone else's booking should ask to see the original agreement for sale, the payment record against the 10% cap, and the promoter's written acknowledgement of the transfer.
| Question | What MoHUA's FAQ says | Provision |
|---|---|---|
| Maximum collected before agreement | 10% of apartment or plot cost, as advance or application fee | Section 13 |
| Who specifies the agreement | Appropriate Government, through Rules | Section 13(2) |
| Is it binding | Yes, on both parties | Section 13(2) |
| Can terms be added | Yes, internal flexibility for other provisions agreed between the parties | Section 13(2) |
| Can terms contradict the Act | No; cannot be contrary to the Act and Rules | Section 13(2) |
What should the agreement contain for a buyer to rely on?
The promises the Act lets you enforce. The FAQ says Section 19 gives the allottee the right "to claim timely possession of booked unit as per the agreement," which makes the possession date in the agreement the reference point for any delay claim. It says Section 18 provides for refund with interest and compensation, or monthly interest, when the promoter fails to hand over possession.
The FAQ also says that under Section 19, the allottee may "obtain information regarding sanctioned plans, layout plans, and schedule for project completion." A Bengaluru buyer can ask for these before signing, and check that the agreement's description of the flat, the common areas and the completion schedule matches them. Our guide to what RERA says about open parking and garages covers one clause that deserves a close look.
Does the cap apply when an agent collects the money?
The cap is framed around what the promoter accepts. The FAQ's wording is that "the promoter cannot accept" more than 10% before the agreement. A buyer dealing through a broker or channel partner should therefore make payments to the promoter's account and get receipts in the promoter's name, so the total can be tracked against the cap.
The FAQ separately says that real estate agents selling registered projects must register under Section 9, and that web-portals engaged in selling plots or apartments are covered by the Act. Our article on RERA rules for brokers and property portals explains how to check an agent's registration.
What if the deal falls through before the agreement?
That depends on the booking terms and the facts. The FAQ does not address refunds of booking amounts in its Section 13 answer. Buyers should read the booking form for any cancellation terms before paying, and keep every receipt. For a buyer whose shortlist includes a project such as TG Codename Iconic in Begur, asking for the booking form and the draft agreement together, before the first payment, avoids surprises.
Disputes over advance payments in private deals can end up in court. Our report on a Karnataka High Court ruling on a sale agreement advance shows one such case. Complaints about a registered project's promoter can be filed with the Authority under Section 31, the FAQ says.
What should a Bengaluru buyer do before paying beyond the booking amount?
- Ask for the total cost of the flat in writing, so the 10% cap can be calculated.
- Add up every payment made so far, including booking amount and application fees.
- Ask for the draft agreement for sale in the format specified under the Karnataka Rules.
- Check the possession date, payment schedule and interest clauses against the Act.
- Ask for the sanctioned plans, layout plan and completion schedule, and compare them with the agreement.
- Make all payments to the promoter's account, with receipts in the promoter's name.
- Sign the agreement before paying anything beyond 10% of the cost.
Frequently asked questions
How much booking amount can a builder take before the agreement?
MoHUA's RERA FAQ says Section 13 provides that the promoter cannot accept more than 10% of the apartment or plot cost as an advance payment or application fees without first executing an Agreement for Sale with the allottee. Buyers should total every payment, including application fees, against that limit.
Who decides the format of the agreement for sale?
According to MoHUA's FAQ, Section 13(2) requires the appropriate Government to specify the Agreement for Sale through Rules. For a Bengaluru project, that is the Karnataka State Government. The FAQ says the agreement is binding on the parties, with internal flexibility for other provisions they agree.
Can a builder's agreement override RERA protections?
No. MoHUA's FAQ says that while internal flexibility can be provided for other provisions agreed between the parties, the terms of the Agreement for Sale cannot be contrary to the provisions of the Act and the Rules made under it. Buyers should question clauses that appear to dilute statutory rights.
Does the 10 percent cap include application fees?
Yes. MoHUA's FAQ says Section 13 bars the promoter from accepting more than 10% of the apartment or plot cost as an advance payment or application fees without first executing an Agreement for Sale. Both types of payment count toward the same limit, so buyers should add them together.
This article explains the Ministry of Housing and Urban Affairs' general FAQs for information only and is not legal advice. The FAQ itself notes it is not a final interpretation of the Act.
Last updated 2026-11-09. PropNewz Team.
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