Ten Per Cent and Not a Rupee More: Section 13 Booking Limits for Hyderabad Flat Buyers

A Hyderabad buyer walks into a site office on a Saturday, likes a 3 BHK on a high floor, and is told the unit can be held only if a large cheque is handed over that afternoon. The agreement, the sales executive says, will come later. On a flat priced at Rs 1.2 crore, the request might be Rs 20 lakh or more. Before writing that cheque, it helps to know that a central law already puts a ceiling on how much a builder can take before the paperwork exists.

That ceiling sits in Section 13 of the Real Estate (Regulation and Development) Act, 2016, the RERA Act, which applies to registered projects across India, Telangana included. This guide explains what the rule says, how to work out your own limit, what the agreement must contain, and what to do if a sales team pushes past it.

The short answer. Section 13(1) of the RERA Act says a promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot or building as an advance payment or an application fee from a person without first entering into a written agreement for sale and registering it under any law for the time being in force. On a Rs 1.2 crore flat, that means anything above Rs 12 lakh should follow a registered agreement, not precede it. The trade-off: the cap protects your money before the deal is documented, but once you sign and register the agreement, you are bound by its payment schedule and by the interest the Act allows the builder to charge on late payments.

What exactly does Section 13 say?

It says two things, one about money and one about paper. In the text of the Act hosted by the Telangana real estate regulator, Section 13(1) reads that a promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot, or building as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and without first registering the said agreement for sale under any law for the time being in force.

Notice the two conditions. It is not enough for the builder to sign a written agreement. The agreement also has to be registered under the law in force before more than ten per cent can be taken. A signed but unregistered agreement does not meet the wording of Section 13(1).

How do you work out your own ten per cent limit?

Start from the cost of the apartment, which is the base the Act uses. The arithmetic is simple. If the cost of the flat is Rs 80 lakh, ten per cent is Rs 8 lakh. If the cost is Rs 1.2 crore, ten per cent is Rs 12 lakh. If the cost is Rs 2.5 crore, ten per cent is Rs 25 lakh.

What counts inside the cap is also set by the wording. Section 13(1) covers a sum taken as an advance payment or an application fee. So a booking amount, an expression of interest cheque, a token, and an application fee all point the same way: together they should not cross ten per cent of the cost until a registered agreement is in place.

Ask for a written cost sheet and keep every receipt. If receipts paid before the agreement add up to more than ten per cent of the cost, pause and ask why.

What must the agreement for sale contain?

More than a price and a flat number. Section 13(2) says the agreement for sale shall be in such form as may be prescribed and shall specify the particulars of development of the project including the construction of building and apartments, along with specifications and internal development works and external development works.

The same subsection lists more items the agreement must specify: the dates and the manner by which payments towards the cost are to be made by the allottees, the date on which possession is to be handed over, and the rates of interest payable by the promoter to the allottee and by the allottee to the promoter in case of default, along with such other particulars as may be prescribed.

That list doubles as a reading checklist. A draft without a possession date, a payment schedule, specifications and default interest both ways is missing items Section 13(2) says it must specify. The words in such form as may be prescribed mean the state rules set the format.

Why does the ten per cent rule matter so much?

Because the agreement is where your other rights are written down. The possession date in the agreement is the date that Section 18(1)(a) uses when it talks about a promoter who fails to complete or is unable to give possession in accordance with the terms of the agreement for sale. Without a registered agreement, a large payment sits outside the document that fixes that date.

The interest rate works the same way. Section 2(za) defines interest and its explanation says the rate chargeable from the allottee by the promoter in case of default shall be equal to the rate the promoter shall be liable to pay the allottee in case of default. Section 13(2) asks for those rates to be specified in the agreement. Paying a big sum before that page exists means paying before the terms of delay and default are on record.

There is a buyer-side obligation too. Section 19(6) says an allottee who has entered into an agreement for sale under section 13 shall make necessary payments in the manner and within the time specified in it.

What if the builder asks for more before registering?

Ask for the registered agreement first, in writing. A reasonable reply is to offer the payment the moment the agreement is registered, which keeps you within the sequence Section 13(1) sets out.

If the push continues, keep the record. Section 31(1) says any aggrieved person may file a complaint with the Authority or the adjudicating officer for any violation or contravention of the provisions of the Act or the rules and regulations against any promoter, allottee or real estate agent. Its explanation says person includes the association of allottees or any voluntary consumer association registered under any law.

The Act also carries a penalty for promoters. Section 61 says if any promoter contravenes any other provisions of the Act, other than those under section 3 or section 4, he shall be liable to a penalty which may extend up to five per cent of the estimated cost of the real estate project as determined by the Authority. Whether a given case leads to a penalty is for the Authority to decide.

For the forms and steps used in Telangana, our earlier guide on TG RERA complaint forms walks through the process.

Does the rule apply before a project is registered?

The better question is why any money would move before registration. Section 3(1) of the Act says no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building in any real estate project or part of it, in any planning area, without registering the project with the Real Estate Regulatory Authority. So the first check comes before the ten per cent question: is the project registered at all?

Checking takes minutes on the regulator's portal, and our guide on how to verify a Telangana RERA project registration shows where to look. Many PropNewz project pages carry the registration number too. The page for My Home Vyoma in Nanakramguda, for example, lists TG RERA number P02400010883, which is the kind of number to match against the portal before paying any booking amount.

What should you do before paying a booking amount in Hyderabad?

Treat the booking amount as the last step of a short check, not the first. The list below follows the order of the Act.

1. Confirm the project is registered with the Telangana regulator, since Section 3(1) bars booking or selling in an unregistered project in a planning area.
2. Get the cost of the apartment in writing and calculate ten per cent of it, which is the most Section 13(1) allows as an advance before a registered agreement.
3. Add up every token, expression of interest and application fee receipt, because Section 13(1) covers advance payments and application fees.
4. Ask for the draft agreement for sale and check it against Section 13(2): specifications, development works, payment dates and manner, possession date and default interest both ways.
5. Compare the default interest clause with Section 2(za), which says the rate charged to you must equal the rate the promoter pays you.
6. Make further payments only after the agreement is registered, and keep the registered copy with the receipts.
7. If pressed to pay more first, keep written records, because Section 31(1) lets an aggrieved person complain to the Authority.

Frequently asked questions

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

Section 13(1) of the RERA Act says a promoter shall not accept more than ten per cent of the cost of the flat as an advance payment or application fee without first entering into a written agreement for sale and registering it under the law in force. On a Rs 1.2 crore flat, the cap is Rs 12 lakh.

Is signing the agreement enough without registering it?

Section 13(1) uses two conditions. The promoter must first enter into a written agreement for sale with the person and must also first register that agreement under any law for the time being in force. Both steps come before the promoter accepts more than ten per cent of the cost as an advance.

What must the RERA agreement for sale specify?

Section 13(2) says the agreement shall be in the prescribed form and specify development particulars including construction, specifications, internal and external development works, the dates and manner of payments, the date of handing over possession, and the interest rates payable by promoter and allottee in case of default, plus other prescribed particulars.

Who can complain if a builder breaks the ten per cent rule?

Section 31(1) of the RERA Act says any aggrieved person may file a complaint with the Authority or the adjudicating officer for any violation of the Act, rules or regulations against a promoter, allottee or real estate agent. The explanation says person includes an association of allottees or a registered voluntary consumer association.

Know your ten per cent figure before the site visit, ask for the registered agreement before the larger cheque, and keep the paper trail. This is general buyer information, not legal advice; confirm current forms on the Telangana regulator's portal.

Last updated 2026-10-27. PropNewz Team.