In a sales lounge off Old Mahabalipuram Road, a Chennai couple were handed a one page booking form and asked for 20 percent of the flat cost to hold a corner unit. The offer expired that evening, they were told. No agreement for sale was on the table, only a receipt with a project name and a unit number. They paid 15 lakh. Eight months later, when they asked to see the agreement, the terms had changed and the possession date had moved. What they had never been told is that the law caps what a builder can take at that stage, and the cap is far lower than what they were asked for.

The short answer. Under Section 13 of the Real Estate (Regulation and Development) Act, 2016, a promoter cannot accept more than 10 percent of the apartment, plot, or building cost as an advance payment or application fee without first executing a written agreement for sale. The Ministry of Housing and Urban Affairs states this plainly in its official FAQs on the Real Estate Act, published in July 2025. The trade off to weigh: paying only the capped amount protects you legally, but a builder in a hot Chennai micro market may refuse to hold the unit on those terms, and you have to decide whether a unit that requires you to break the law to secure it is worth having.

What exactly does Section 13 say about booking money?

Section 13 sets a hard ceiling on pre agreement money. As the Ministry of Housing and Urban Affairs puts it in its official FAQs, Section 13 provides that the promoter cannot accept more than 10 percent of the apartment or plot cost as an advance payment or application fee without first executing the agreement for sale. The ceiling covers the money you hand over as booking amount, token, or application fee, whatever the builder chooses to call it on the receipt.

The sequence matters as much as the number. The law does not say a builder may collect 40 percent and produce an agreement later. It says the agreement comes first, and only then can the builder take more than the 10 percent threshold. A receipt is not an agreement. An allotment letter is not an agreement. Until the agreement for sale is executed, the 10 percent ceiling is the limit on what you should be paying.

Why does the agreement for sale matter so much?

The agreement for sale is the document that turns verbal promises into enforceable terms. Under Section 13(2), the appropriate Government prescribes the form of agreement for sale to be entered into between the promoter and the allottee. The Ministry FAQs confirm that this agreement is binding on the parties, and that while some internal flexibility can be built in for terms decided between the parties, those terms cannot be contrary to the provisions of the Act and the Rules made under it.

That last point is the protection most buyers miss. A builder cannot use a custom clause to sign away the rights the Act gives you. If a draft agreement contains a term that conflicts with the Act, the Act prevails. This is precisely why the law puts the agreement before the money. Once you have paid a large sum without an agreement, your leverage to negotiate the terms of that agreement has already gone.

How much can a Chennai builder actually ask for at booking?

Up to 10 percent of the cost of the apartment or plot, and no more, until the agreement for sale is executed. On a flat priced at 80 lakh, that means a maximum of 8 lakh before the agreement exists. A demand for 20 or 25 percent at the booking stage, with the agreement promised for later, sits outside what Section 13 permits, regardless of how the demand is framed or how urgent the offer sounds.

The table below sets out how a compliant booking differs from the pattern that catches buyers out. Use it to read the situation while you are still in the sales office, not after the money has moved.

If a builder insists that the extra money is a separate charge and therefore outside the cap, treat the claim with care. The Ministry FAQs describe the cap as applying to the advance payment or application fee, and relabelling the same pre agreement money does not change what it is in substance.

What happens to your money if the project is delayed?

The Act gives you two routes, and both depend on documentation. Under Section 18, where the promoter fails to hand over possession of the booked unit, the allottee has the right to withdraw from the project and claim a full refund along with interest and compensation. Alternatively, if the allottee chooses to stay with the project, they are entitled to interest for every month of delay until possession is handed over, and to compensation in certain circumstances.

Notice what makes either route workable: a written agreement recording the price, the unit, and the possession date. A buyer holding only a receipt has a far harder time proving what was promised and when. Our earlier guide on RERA Section 18 rights when possession is delayed walks through how that claim works in practice, and it rests on the paperwork Section 13 is designed to put in your hands first.

What are your own obligations once you have booked?

The Act is not one sided, and buyers carry duties too. Section 19 sets out the duties of allottees, which the Ministry FAQs summarise as making payments in respect of the apartment or plot, bearing liability towards interest for any delay in payment, taking possession when it is due, participating in the formation of the association, and completing the registration of the conveyance deed.

In practical terms, once a lawful agreement is in place you are expected to meet the payment schedule it records. Missing instalments can attract interest, and repeated default has consequences of its own. The protection Section 13 gives you is about the order and size of the first payment, not a licence to pay late afterwards. If you are still weighing whether to proceed at all, our guide on cancelling a flat booking and your refund and forfeiture rights covers what happens when a buyer steps away.

What should you do if a builder demands more than the cap?

Slow the transaction down and put the request in writing. Ask the sales team to confirm by email what percentage of the total cost they are asking for before the agreement for sale, and to state when the agreement will be executed. A compliant builder has no difficulty answering both questions. A builder relying on urgency often will not put the same demand in writing that they made across a desk.

Keep every receipt, name the payment correctly, and route funds through banking channels so the trail is clean. If the project is registered, the regulator is the forum for a grievance about the promoter's conduct, and the Ministry FAQs note that the adjudicating officer, who is or has been a District Judge, decides disputes under Sections 12, 14, 18, and 19 of the Act. A documented paper trail is what makes any of those routes usable later.

A booking stage checklist for Chennai buyers

Run these seven steps before you transfer any booking amount.

1. Ask for the total cost of the unit in writing, so you can calculate the 10 percent ceiling yourself.
2. Confirm in writing what percentage is being demanded before the agreement for sale is executed.
3. Ask to see the draft agreement for sale before you pay, not after.
4. Check the draft for any clause that appears to cut down rights the Act gives you.
5. Pay only through traceable banking channels and collect a dated receipt each time.
6. Confirm the possession date recorded in the agreement matches what the sales team promised.
7. Store the agreement, receipts, and all written exchanges together as one file.

None of these steps require a lawyer to begin, though a lawyer reading the draft agreement is money well spent. They simply keep the order of events the way the law intended, with the document ahead of the money rather than the other way around.

Frequently asked questions

How much can a builder take before the agreement for sale? Not more than 10 percent of the apartment or plot cost. The Ministry of Housing and Urban Affairs FAQs state that Section 13 prevents a promoter from accepting more than 10 percent as an advance payment or application fee without first executing the agreement for sale, whatever the payment is labelled.

Is a booking receipt the same as an agreement for sale? No. A receipt records that money changed hands, while the agreement for sale is the prescribed document that records the unit, price, and possession terms. Section 13 requires the agreement to be executed before a promoter takes more than the 10 percent advance, so a receipt alone does not satisfy the law.

Can a builder add clauses that override my RERA rights? No. The Ministry FAQs confirm the agreement for sale is binding and that some flexibility is possible for terms decided between the parties, but those terms cannot be contrary to the provisions of the Act and the Rules made under it. A clause conflicting with the Act does not displace the Act.

What if possession is delayed after I have paid? Section 18 lets you withdraw from the project and claim a full refund with interest and compensation, or stay with the project and receive interest for every month of delay until possession. Both routes are far easier to pursue when a written agreement records the promised possession date.

Last updated 2026-07-25. PropNewz Team.