In today’s real estate market, many homebuyers report being asked to pay 70% to 80% of the total flat value even before the sale agreement is registered. Developers often justify this as a market practice or link it to construction progress. However, under the Real Estate (Regulation and Development) Act, 2016 (RERA), such demands are tightly regulated—and in most cases, unlawful.
This article explains why developers ask for 80% upfront, when such a demand is legally valid, and what buyers can do if the demand violates RERA.
Why Some Developers Ask for 80% Advance Payment Before Registration
Despite clear restrictions under RERA, some developers still demand up to 80% of the flat cost at early stages mainly to improve cash flow and fund ongoing construction without relying heavily on bank loans. Collecting large sums upfront reduces interest burden and provides greater financial flexibility.
Another key reason is the delay of sale agreement registration, which involves stamp duty, registration charges, and the fixing of legally binding possession timelines. By postponing registration, developers retain more control over project schedules and reduce immediate statutory obligations.
Market conditions also play a role. In high-demand projects, buyers often fear losing a unit or missing future price appreciation. This urgency—combined with limited awareness of RERA provisions—leads many buyers to comply.
However, commercial convenience or market pressure cannot override the law. Without a registered Agreement for Sale, demanding 80% advance payment remains a violation of RERA, regardless of construction progress or buyer consent.
When a Developer CAN Legally Demand 80% Payment
A developer is legally entitled to demand up to 80% of the flat price only when all the following conditions are met simultaneously. Missing even one condition makes the demand illegal. The important thing is Getting the sale agreement registered.
1️⃣ Registered Agreement for Sale Is Already Executed
- The Agreement for Sale must be signed and registered under the Registration Act.
- Before registration, a developer cannot collect more than 10% of the total consideration.
👉 If there is no registered agreement, any demand for 80% is illegal.
2️⃣ The Payment Schedule in the Agreement Allows It
- The registered agreement must clearly specify a construction-linked payment plan, such as:
- Completion of plinth
- Completion of slab / structural framework
- Brickwork, plastering, and finishing stages
Only when the cumulative milestones genuinely add up to 80% can such a demand be raised.
3️⃣ Construction Has Actually Reached That Stage
- Payment demands must match actual on-ground construction progress, not projections or promises.
- If construction is only 30–40% complete, demanding 80% is a violation—even if an agreement exists.
👉 Buyers are entitled to ask for:
- Engineer’s certificate
- Architect’s certificate
- Chartered Accountant (CA) certificate
These certifications are mandatory under RERA for milestone-based payment demands.
4️⃣ Demand Is Raised Through a Formal Demand Notice
- The demand must be documented through:
- Official letter
- Builder portal / system-generated notice
- It must clearly reference the specific construction milestone achieved.
When Demanding 80% Is Illegal
A developer cannot demand 80% if:
❌ The Agreement for Sale is not registered
❌ The buyer has paid only a booking amount or token
❌ Construction has not reached the relevant milestone
❌ The demand is made orally or informally
❌ The agreement is one-sided or violates RERA norms
In all these situations, the demand violates Section 13 of RERA.
Common Tricks Buyers Should Watch Out For
- “Pay 80% now, registration later”
- “This is only an advance, not sale consideration”
- “Everyone in the project is paying like this”
- “Registration will be done at possession”
👉 None of these override RERA. Law always prevails over builder practice.
What a Buyer Can Do If 80% Is Demanded Wrongly
If a developer raises an unlawful demand, a buyer can:
- Refuse payment until legal conditions are met
- Send a written objection citing Section 13 of RERA
- File a RERA complaint seeking:
- Declaration that the demand is illegal
- Refund of excess amount (if already paid)
- Interest and penalty against the developer
RERA authorities across India have consistently ruled in favour of buyers in such cases.
One-Line Takeaway
A developer can demand 80% of the flat price only after a registered Agreement for Sale and only when construction-linked milestones genuinely justify that amount. Anything else is a RERA violation.
Role of a Channel Partner in Protecting Buyers
As a channel partner, Verified.RealEstate acts as an independent buyer-support intermediary, helping homebuyers navigate transactions safely and legally. This includes verifying RERA registration, checking whether the Agreement for Sale is properly registered, flagging illegal advance payment demands, and guiding buyers before releasing high-value instalments. By focusing on compliance, documentation clarity, and risk prevention, a channel partner helps buyers make informed decisions rather than pushing sales at any cost.