Q & A
Can Developers Demand an Advance Exceeding 10 Percent Price of Property?
The RERA Act of 2016 as per its Section 13 (1) and Rule 8(1) has clearly laid down that no RERA-registered developer/ project promoter shall accept a sum exceeding 10 percent of the cost of the property- apartment, plot, or building. The Haryana Real Estate (Regulation and Development ) Rules 2017 also bars charging of more than 10 percent of property value as advance payment/ application money
Further, the RERA Act 2016 also stipulates that no promoter shall accept advance from the home buyer without a written agreement for sale and the registration of the said agreement. This agreement for sale is also required to clearly specify various project particulars including payment details, possession date, and other relevant information as prescribed under the Act.
The home buyers must take note of all this and should make only 10 percent of the project value as advance payment to the developer and that too along with the builder-buyer agreement. Haryana Real Estate Regulatory Authority (H-RERA) Gurugram bench has recently emphasized this after receiving complaints from some home buyers about certain developers charging more than 10 percent of the property value as advance payment.