Booking Amount vs Token Advance
| Factor | Token Advance | Booking Amount |
|---|---|---|
| Amount | Very small — ₹10,000–₹50,000 typically | Larger — typically 5–10% of flat cost |
| Purpose | Holds flat off market briefly while you decide | Formally reserves flat for you |
| Document | Simple receipt — no detailed agreement | Booking form + receipt with flat details |
| Refundability | Usually refundable — informal arrangement | Subject to RERA rules and agreement terms |
| Binding? | Not legally binding in most cases | More formal — sets terms for subsequent agreement |
What to Check Before Paying Booking Amount
Due Diligence Before Any Booking Payment
- RERA registration: Project must be registered on your state's RERA portal — verify at rera.karnataka.gov.in or equivalent. Never pay for unregistered project.
- Land title: Builder must have clear title to the land — check EC and land ownership
- Approvals: Building plan approval, layout approval from local authority
- Builder track record: Check previous projects — delivery timeline, RERA complaints history
- Get written agreement: Demand a builder-buyer agreement soon after booking — not just a receipt
- Flat details on receipt: Ensure the receipt specifies exact flat number, floor, tower, carpet area, and total cost
Never pay in cash: Always pay booking amount by cheque, NEFT, or UPI — get a proper GST receipt from the builder. Cash payments have no legal backing and cannot be claimed under RERA or courts. Ensure TDS provisions (if total purchase ≥₹50 lakh) are factored into payment planning.
Related Terms
Frequently Asked Questions
Booking amount is the initial payment made to a builder to reserve a flat before the formal sale agreement. Typically 5–10% of the flat's value. Under RERA, a builder cannot demand more than 10% of the apartment cost before signing a written sale agreement. Always get a written receipt specifying the flat details, amount paid, and refund conditions.
If the builder cancels the project or the flat allotment — full refund plus interest (at SBI MCLR+2%) within 45 days under RERA. If the buyer cancels — refund depends on the agreement terms; builders typically deduct a cancellation charge (1–2% of booking value). Never pay booking amount without getting the refund conditions in writing.
RERA mandates maximum 10% before signing a written agreement. Typically builders ask for 5–10%. Pay the minimum required to hold the flat — preferably after verifying RERA registration, land title, and project approvals. Never pay large advances (more than 10%) before a written, RERA-compliant sale agreement is signed.
No. Under RERA, a builder cannot advertise, market, sell, or accept bookings for any project without first registering it with the state RERA authority. Accepting advance for an unregistered project is a RERA violation — do not pay. Check the project's RERA registration number on your state portal before any payment.
Must get: (1) Official receipt with builder's letterhead or GST invoice showing amount, flat number, tower, floor, carpet area, and total cost, (2) RERA registration number of the project, (3) Copy of the booking form with terms and conditions including refund policy. Insist on a builder-buyer agreement within 2–3 months of booking.