RERA Guidelines on Advance Payment, Refunds & Compensation
Advance Payment, Refund & Compensation – What RERA Says
Buying a home is a dream for many, but sometimes builders delay the project, cancel it, or fail to follow the law. In such cases, the Real Estate Regulatory Authority (RERA) acts as a shield for homebuyers. One of the strongest protections under RERA is the right to get back your booking amount, token money, or advance payment, along with interest and sometimes extra compensation. Here is a simple but complete guide so you know exactly what your rights are and how to claim them.
What RERA says about advance payments and token money
Under Section 13 of the RERA Act, a builder cannot collect more than 10 percent of the total property cost as advance payment before signing and registering the sale agreement. This amount includes the booking fee, token amount, or application charges.
For example, if a flat costs 60 lakh, the builder can only take up to 6 lakh before the agreement is signed. If they demand more, it is a direct violation of RERA.
When you can get a refund of booking amount from the builder
Section 18 of RERA makes it clear: if the builder fails to deliver the home on time, cancels the project, loses registration, or breaks the agreement terms, the buyer can claim a full refund of all money paid. This refund also includes interest and, in some cases, compensation.
The interest rate is usually SBI’s MCLR + 2%, which ensures you are compensated for the time your money was stuck. You can even withdraw without giving a reason, though if it’s not the builder’s fault, some states allow them to deduct a small percentage (usually around 2%).
What if you stay in the project despite delay
Even if you don’t cancel, you can still claim monthly interest for every month of delay until possession is given. This prevents builders from dragging projects without paying for your financial loss.
Real cases where RERA protected buyers
In Maharashtra, a builder had to refund the full booking amount after a buyer’s loan was rejected because the contract terms were unfair.
In Haryana, a buyer got 38.5 lakh back plus interest because the flat wasn’t delivered on time.
In Telangana, a developer refunded 9 lakh with interest after being found guilty of fraud in a plot sale.
These cases prove that RERA actively ensures that buyers are not left helpless.
Step-by-step process to get refund of booking amount under RERA
Collect all documents – booking receipt, payment proofs, agreement, and any communication with the builder.
Send a legal notice – inform the builder in writing that you want a refund under RERA. Give them a reasonable deadline, usually 15–30 days.
File a complaint with State RERA – if the builder doesn’t respond, go to your state RERA website, fill out the complaint form, and attach documents. You can file online or in person.
Pay the complaint fee – usually ranges from 1,000 to 5,000, depending on the state.
Attend the hearing – RERA will set a hearing date where both you and the builder will present your case.
Get the order – if RERA rules in your favour, the builder will be ordered to refund within a specific period (often 60–90 days) with interest.
How to file a RERA complaint online
Visit your state RERA website (for example, maharera.mahaonline.gov.in for Maharashtra).
Look for the “File Complaint” or “Online Complaint” section.
Create an account and fill in your details.
Upload proof documents (payment receipts, agreements, correspondence).
Make the online payment for the complaint fee.
Submit and note your complaint reference number.
Tips to avoid booking amount disputes
Never pay more than 10% before signing and registering the sale agreement.
Always check if the project is RERA registered and note the registration number.
Read the terms of cancellation before paying token money.
Keep all payment proofs in safe storage.
Avoid verbal agreements — everything should be in writing.
Frequently Asked Questions
Can the builder take more than 10% before the sale agreement?
No, it is illegal under RERA. Only up to 10% can be taken before signing the sale agreement.
How much can be deducted if I cancel for personal reasons?
If you cancel without any fault of the builder, some states allow a small deduction (around 2%) from the booking amount.
Will I get interest if the builder delays possession?
Yes, interest is usually SBI MCLR + 2% for every month of delay.
Can I claim mental stress or extra costs?
Yes, RERA allows compensation for mental stress, higher purchase costs, or lost rental income due to the delay.
How long does it take to get a refund under RERA?
Once the order is passed, most states require the refund to be made within 60–90 days.
In short, RERA has made buying property safer by setting clear rules for booking amounts, refunds, and penalties. Always remember your rights: never pay more than 10% before the agreement, demand fair terms, and if your builder fails you, use RERA to get your money back with interest and compensation. Knowing these rules can save you from big financial and emotional losses.
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