Section 13 RERA: The 10% Advance Cap & Agreement for Sale Rules

The Rule in Section 13(1): 10% Before Any Written Agreement

Section 13(1) of the RERA Act draws a hard line. A promoter cannot accept more than 10% of the cost of an apartment, plot, or building as an advance payment or application fee before entering into a written Agreement for Sale and getting it registered. The word 'registered' matters. An unregistered agreement, a booking form, or an allotment letter does not satisfy this section.

This single provision protects the buyer's money at the earliest and riskiest stage of a transaction, before construction milestones and legal commitments are locked in. The 10% ceiling applies to the total cost of the property, not the carpet area value or the base rate alone.

For a property broker on the ground, the trigger is simple to memorise. If the developer wants more than 10% and there is no registered Agreement for Sale, the demand itself is unlawful. There is no grace window and no exception for 'premium' or 'preferred' inventory.

What the Agreement for Sale Must Contain Under Section 13(2)

Section 13(2) says the Agreement for Sale must be in the form prescribed by state rules. Under the Maharashtra Real Estate (Regulation and Development) Rules, the model agreement carries mandatory clauses that a registered intermediary should be able to spot in seconds.

The agreement must specify the particulars of development, the date the promoter will hand over possession, and the full construction-linked payment schedule the allottee will follow. It must also state the rate of interest payable by the promoter to the allottee on default, and the equivalent rate payable by the allottee to the promoter. Under MahaRERA practice, this interest is pegged to the State Bank of India's highest Marginal Cost of Lending Rate plus 2%, applied equally to both sides.

If any of these are missing, the document is defective even if it is registered. A property advisor who reviews the draft before the buyer signs adds real value here.

From MOFA's 20% to RERA's 10%: What Changed

Before RERA, Maharashtra was governed by the Maharashtra Ownership Flats Act, 1963 (MOFA). Under MOFA, a promoter could collect up to 20% of the price before executing the Agreement for Sale. RERA cut that ceiling in half.

The reduction from 20% to 10% was deliberate. It shrinks the buyer's unsecured exposure and forces the developer to register the agreement earlier in the sale cycle. Registration means stamp duty is paid and the transaction enters the public record, which is exactly what most pre-RERA disputes lacked.

Candidates should hold both numbers in memory because examiners test the contrast directly. MOFA allowed 20%. RERA Section 13(1) allows 10%. Any question that quotes the older figure as the current legal limit is testing whether you know the law changed. When you calculate the buyer's stamp duty exposure at agreement stage, the stamp duty calculator gives you the Maharashtra rate quickly.

Worked Example: The ₹80 Lakh Flat

Take a flat with a total cost of ₹80,00,000. Section 13(1) caps the pre-agreement advance at 10%, which is ₹8,00,000.

The promoter can lawfully collect ₹8 lakh as booking or application money. To collect one rupee more, a written Agreement for Sale must be executed and registered first. If the developer asks for ₹16 lakh (20%) or ₹24 lakh (30%) 'to confirm the booking' without that registered agreement, the demand is a straight violation of Section 13.

Work it as a percentage every time, because the ceiling scales with price. On a ₹1.2 crore flat the cap is ₹12 lakh. On a ₹50 lakh flat it is ₹5 lakh. The formula never changes: total cost multiplied by 0.10. Use the total cost calculator to confirm the true property cost first, since developers sometimes quote base price and exclude charges that belong in the total.

What Property Brokers Must Watch For in the Field

The most common violation you will see is the inflated 'booking amount'. Developers routinely ask for 20%, 30%, even 40% upfront, labelled as booking, token, or confirmation money, with no registered Agreement for Sale in sight. The label does not change the legal position. If it exceeds 10% before registration, Section 13 is breached.

Your own exposure is real. A real estate agent who facilitates a sale under Section 10 has a duty not to be party to an unfair or unlawful practice. Helping a buyer hand over 30% against an unregistered allotment letter can draw penalties under Section 62, up to ₹10,000 per day of continuing default. That risk sits on your registration, not just the developer's.

Before you let a client pay, confirm the agreement is drafted, executed, and lodged for registration. Keep the payment within 10% until that happens. Documenting your advice protects you if the deal later goes to the Authority.

How This Section Is Tested in the Exam

Section 13 appears in predictable formats. The most frequent is the direct numerical: 'A promoter can collect a maximum of what percentage before executing the Agreement for Sale?' The answer is 10%. Expect a variant that plants 20% as a distractor to catch anyone still thinking in MOFA terms.

The second format is the worked figure. You will be given a property cost and asked for the maximum lawful advance. Multiply by 0.10 and move on. The third tests the mandatory contents under 13(2), usually asking which clause must appear, with possession date, payment schedule, and interest rate as the correct set.

Build speed on these through topic-wise practice on Section 13, then confirm your recall under time pressure with a full-length RERA mock test. The syllabus treatment of promoter obligations is set out in the MahaRERA exam syllabus.

Section 13 vs Section 18: The Pair Examiners Love

Section 13 governs the entry point of the transaction. Section 18 governs what happens when the promoter fails to deliver. They are tested together because they mark the two ends of the same buyer-protection chain. If the agreement under Section 13(2) fixes a possession date and the promoter misses it, Section 18 lets the allottee either withdraw with a full refund plus interest, or stay and claim interest for every month of delay.

Know which section is triggered by what fact. A dispute about advance collection or a missing registered agreement is Section 13. A dispute about missed possession, refund, or delay interest is Section 18.

| Point | Section 13 | Section 18 | |---|---|---| | Stage | Before/at agreement | After default on possession | | Trigger | Advance above 10% or no registered agreement | Promoter fails to give possession by agreed date | | Core rule | Cap advance, register Agreement for Sale | Refund with interest, or interest for delay | | Penalty link | Section 62 | Section 59 / interest at SBI MCLR +2% |

Model the delay figure using the RERA delay interest calculator so the Section 18 math is second nature on exam day.