📌a builder cannot collect more than 10% of a property’s cost as an advance or application fee before entering into a written agreement for sale and registering it.

A recent Maharashtra ruling involving a ₹10 lakh penalty reinforces why buyers should check agreement registration before making substantial payments.

Emerald Haven collected nearly 60% before registration

In its 13 October 2026 order concerning TVS Emerald Luxor, TNRERA examined payments of ₹1,72,93,689 against a total consideration of ₹2,88,22,815—approximately 60%.

The sale and construction agreements dated 17 July 2025 remained unregistered. TNRERA imposed a ₹50,000 penalty for violating Section 13 of the RERA Act. The penalty is payable to TNRERA, not to the buyers.

The authority directed registration of the agreements and conveyance of the undivided land share within 30 days. Apartment handover remained linked to the promised delivery date.

The buyers alleged that TVS Emerald Luxor was advertised as being in the “heart of Anna Nagar,” with PIN code 600040, while its RERA records identified the location as Padi, with PIN code 600050. They argued that this influenced their purchase decision and led them to pay an Anna Nagar premium.
The developer denied deliberate misrepresentation. It maintained that the project was situated in Anna Nagar West Extension and that the different PIN code in the registration records was a clerical error.
TNRERA had earlier restricted advertising pending correction of the address details. In its October order, the authority recorded that the PIN code had been corrected to 600040, found no violation of Section 12—which concerns false or misleading advertisements—and lifted the interim restriction. The developer was still required to display the correct postal and site addresses in its advertisements.

Maharashtra tribunal orders refund and ₹10 lakh penalty

In Manojkumar Singh v. Era Realtors Pvt. Ltd., the Maharashtra Real Estate Appellate Tribunal examined a similar failure to execute and register an agreement for sale.

The buyer had paid approximately ₹1.008 crore against a flat price of ₹2.77 crore. The builder continued demanding instalments and eventually cancelled the allotment for non-payment.

On 7 September 2026, the tribunal held the cancellation unlawful in those circumstances. It ordered a refund of approximately ₹80.77 lakh, after accounting for an earlier ₹20 lakh refund, along with interest. It also imposed a ₹10 lakh penalty and awarded ₹50,000 in costs to the buyer.

What does RERA’s 10% rule mean?

Section 13 requires the promoter to enter into a written agreement for sale and register it before accepting more than 10% of the apartment, plot or building cost as an advance or application fee.

For an apartment costing ₹80 lakh, the threshold is ₹8 lakh. Registration must happen before the promoter accepts payments beyond that threshold.

This is an existing legal requirement. The two decisions illustrate its enforcement.

A receipt, signed agreement and registered agreement serve different purposes

Signing an agreement alone is not enough: Section 13 requires its registration before the promoter accepts more than 10% of the property’s cost as advance payment.

An agreement for sale also differs from the final conveyance deed that transfers ownership.

Asked to Pay 80% Before Registration?

The Emerald Haven case highlights why buyers should question large advance demands before their sale agreement is registered. Read our guide on developers demanding 80% payment before registration to understand the payment rules and checks to make before releasing further instalments.

What buyers should check before paying more

Check the total amount already paid against the property cost. Confirm that the agreement for sale is signed and registered before payments cross 10%.

Before paying a substantial advance, get your sale agreement and payment terms reviewed through Verified.RealEstate’s legal services. This can help identify missing registration steps and clauses that need clarification before you commit more money.

Review the payment schedule, possession date and default-interest terms. Keep copies of the agreement, receipts and correspondence.

Project registration with RERA and registration of your purchase agreement are separate checks. Completing one does not complete the other.