Paying a Token for a New Bengaluru Flat? RERA Caps It at 10 Percent Before the Agreement

Picture a Saturday site visit in North Bengaluru. The sample flat is bright, the sales manager says only a few units are left at the launch price, and a cheque for a "token" will hold the one you like. The price is Rs 85 lakh. How much can the builder lawfully take before you have signed anything binding, and what should exist before you hand over even that? The RERA Act answers both questions more precisely than a sales pitch suggests.

The short answer. Under Section 13 of the RERA Act, as explained in the Ministry of Housing and Urban Affairs' FAQs, a promoter cannot accept more than 10 percent of the cost of the apartment as an advance payment or application fee without first executing an agreement for sale with the allottee. Under Section 3(1), the project must be registered with the Real Estate Regulatory Authority before any advertising, marketing or booking. On an Rs 85 lakh flat, that caps the pre-agreement payment at Rs 8.5 lakh. The trade-off: a token secures a unit you want, but every rupee paid before the agreement for sale rests on a receipt rather than on the binding agreement the Act requires, so keep it small and documented.

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

No more than 10 percent of the cost. The Ministry of Housing and Urban Affairs' FAQs on the RERA Act, dated July 2025, say 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 an agreement for sale with the allottee.

In our reading, the rule turns on the money rather than its label. A token, a booking amount, an expression of interest deposit and an application fee paid before the agreement for sale all function as advance payments. Add them up. If the total crosses 10 percent of the flat's cost before an agreement is executed, the promoter is asking for more than the Act allows.

The cap protects the stage when a buyer is most exposed. Before the agreement for sale, the buyer's rights rest on a receipt and an allotment letter. After it, they rest on a binding agreement in the form the state's rules prescribe.

What must exist before you pay a token at all?

A RERA registration. The FAQs say that under Section 3(1), the promoter is required to register the project with the Real Estate Regulatory Authority before any advertising, marketing, booking, selling, offering for sale or inviting persons to purchase in the project. They add, under the heading of when a promoter can start to advertise, that the promoter can advertise the project for sale after it has been registered.

That makes the registration number the first thing to ask for at a site visit. A project that is taking bookings without one, unless it falls within an exemption such as the small project limits in Section 3(2), is booking in breach of the Act. The FAQs say that under Section 59, a promoter who fails to register when obliged to is liable to a penalty of up to ten percent of the estimated cost of the project.

The FAQs also say the term advertisement includes any medium adopted in soliciting for sale, including SMS and emails. So a pre-launch message inviting you to pay an expression of interest deposit is a form of solicitation the registration requirement covers. We covered how those messages are treated in our guide to RERA rules on SMS and email property advertisements.

What if the builder says registration is only days away?

Wait for the number. The FAQs say the Regulatory Authority is required to register a project within 30 days of receiving an application, if the application complies with the Act, rules and regulations. Under Section 5, if the Authority fails to decide within that period, the project is deemed to be registered.

The FAQs also say that if an application is incomplete, the Authority may give the promoter an opportunity to complete it, and may reject it, but only after giving the promoter an opportunity of being heard. So an application can be pending, completed, deemed registered or rejected, and a buyer cannot tell which from a sales conversation.

The practical answer is simple. Registration is the trigger the Act sets for any booking, so a project that is about to be registered can take your token once it is registered. A short wait costs you little; paying before registration puts your money into a transaction the Act says should not yet be happening. We explained the 30 day timeline and deemed registration in more detail in our guide to RERA registration timelines.

How do the numbers work on a Bengaluru flat?

Simply. Ten percent of the flat's cost is the ceiling on everything paid before the agreement for sale. The table below shows the ceiling at five illustrative prices, with what the cap means at each stage:

The arithmetic is the easy part. The harder part is knowing what "cost of the apartment" covers in your quotation, so ask the builder for the total cost on which the 10 percent is being calculated and keep that figure in writing. If a payment plan asks for, say, 20 percent within thirty days of booking, check whether an agreement for sale will be executed before the amount above 10 percent falls due.

What should the agreement for sale give you?

A binding contract in the prescribed form. The FAQs say that under Section 13(2), the appropriate government is required to specify through rules the agreement for sale to be entered into between the promoter and the allottee, and that the agreement is binding on the parties. Internal flexibility may be provided for other provisions, but the terms of the agreement cannot be contrary to the provisions of the Act and the rules.

Once the agreement is in place, more of the Act's machinery engages. The FAQs say Section 18 gives an allottee whose possession is delayed the right to withdraw and claim a full refund with interest and compensation, or to stay and receive interest for every month of delay. They also say the rate of interest payable by the promoter and by the allottee in case of default shall be the same, as specified by the appropriate government in the rules.

The money you pay also goes into a protected structure. The FAQs say the promoter must maintain a separate bank account for every project, into which 70 percent of the money received from allottees is deposited for construction and land cost, with withdrawals in proportion to the percentage of completion. We explained how to check a project's registration details in our earlier guide to verifying a Karnataka RERA project before booking.

What if the builder asks for more, or the deal falls through?

Pause before paying. A demand for more than 10 percent before the agreement for sale is a signal to stop and ask why the agreement is not ready. In our reading, the Act's cap does not depend on how the payment is labelled, and a buyer can reasonably insist on executing the agreement before paying beyond it.

If you decide not to proceed after paying a token, what you get back depends on the terms you accepted when you paid it. That is why the receipt and any booking form matter: read the cancellation and refund terms before you sign the cheque, and keep a copy. If the terms are unclear or absent, ask for them in writing first.

Whether you are booking in a large launch or a project such as Assetz Codename Paradise on Hennur Road, the same sequence protects you: registration first, a small documented token, then the agreement for sale before larger payments.

What should you check before paying a token?

Use this list at the site office:

1. Ask for the project's RERA registration number and note it on your copy of the quotation.
2. Ask for the total cost of the flat on which the 10 percent limit will be calculated.
3. Add every amount you will pay before the agreement for sale, whatever its label.
4. Confirm the total stays within 10 percent of the cost of the flat.
5. Read the cancellation and refund terms on the booking form before paying.
6. Pay by a traceable method and keep receipts naming the project and unit.
7. Ask when the agreement for sale will be executed, and get the date in writing.

Frequently asked questions

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

No more than 10 percent of the cost of the apartment. MoHUA's FAQs on the RERA Act say Section 13 bars a promoter from accepting more than 10 percent as an advance payment or application fee without first executing an agreement for sale with the allottee.

Can a builder take bookings before RERA registration?

Not for a project that must be registered. MoHUA's FAQs say Section 3(1) requires registration with the Real Estate Regulatory Authority before any advertising, marketing, booking, selling or offering for sale, and that a promoter can advertise only after registration. Small projects within Section 3(2) limits are exempt.

Does the 10 percent limit include an expression of interest deposit?

The limit in Section 13, as MoHUA's FAQs describe it, covers advance payments and application fees taken before the agreement for sale. Add every amount you pay before that agreement, whatever it is called, and check the total stays within 10 percent of the cost of the flat.

Is the interest rate on late payment the same for buyer and builder?

Yes. MoHUA's FAQs say that under the Explanation to Section 2(za), the rate of interest payable by the promoter or the allottee in case of default shall be the same, and that the rate is to be specified by the appropriate government in its rules.

Last updated 2026-10-20. PropNewz Team.